According to John Hyland who is the global head of exchange-traded products for Bitwise Asset Management, there could soon be a cryptocurrency ETF approved by the Securities and Exchange Commission.
Hyland played a vital role in developing the first commodity and oil ETFs as a CIO at the United States Commodity Funds. He currently hopes to introduce some of the first crypto ETFs.
According to Hyland, the SEC’s concerns about a crypto ETF have been addressed – and Bitwise’s private cryptocurrency find opened last year has kept its crypto assets in a regulated custodian, which is a service that the five large ETF custodial companies are considering to offer.
As he explained, an ETF does not hold the coins. Instead, it swaps or futures them – and could therefore be custodized by an ETF custodian that manages the futures-based currency or commodity ETFs.
Still, there are some concerns for the SEC. One of them is the enhanced regulated trades. While some of the big ETF shops are establishing cryptocurrency trading desks, a cryptocurrency ETF could transact on platforms with a regulatory status that is similar to what they already do with equities.
So, the SEC is primarily concerned about how crypto ETFs will perform in real life. According to Hyland, this can be addressed by what is happening in Europe right now, where four crypto ETFs with $600 million in AUM, have existed on regulated exchanges since 2015.
SEC, as he believes, will act soon and the regulators will find it easier to approve a product connected to futures since the Bitcoin futures are regulated in the US.
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