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ETF: The Future of Crypto Trading in the Stock Exchange

An Exchange Traded Fund (ETF) is a type of security that tracks various forms of assets that can be purchased or sold on a stock exchange, similar to a regular stock. As cryptocurrency gains more prominence in modern society, more cryptocurrency ETFs are being approved by countries; however, very few countries have approved of a Bitcoin ETF. Sweden, Canada, Germany, Switzerland, Germany, France, Netherlands, and Brazil are currently the only countries in the world that have passed Bitcoin ETFs to be traded on their exchanges. Other countries are interested in developing their platform to be able to trade many different types of cryptocurrencies while some are mainly focused on Bitcoin. 

A common problem between countries that want to trade cryptocurrency assets is the resistance from their respective security councils. The Phillipine Stock Exchange wants to become a platform for trading cryptocurrency assets but is waiting for approval from its Securities and Exchange Commission (SEC). The SEC was supposed to release the guidelines for cryptocurrency exchanges in 2019 but instead kept them as a draft and still has yet to finalize them. In the United States, countless proposals for ETFs have been shot down with more to come. On May 11, 2021, the SEC issued a public statement regarding Bitcoin closed-end funds, mutual funds, and ETFs; "Among other things, investors should understand that Bitcoin, including gaining exposure through the Bitcoin futures market, is a highly speculative investment. As such, investors should consider the volatility of Bitcoin and the Bitcoin futures market, as well as the lack of regulation and potential for fraud or manipulation in the underlying Bitcoin market." Despite this, Hester Peirce, one of the five SEC commissioners, has been very adamant about how the United States should have already passed BitCoin ETFs and could eventually fall behind other nations. In addition, she addressed the double standards of the SEC’s approach to regulating cryptocurrency in comparison to other products, as well as the faltering rationale of volatility that supports their decisions. Other crypto-related businesses are now becoming prominent in the stock exchange. Recently, Argo Blockchain, a Bitcoin mining business based in London, has expressed interest in listing on the Nasdaq. There are large differences in opinions regarding cryptocurrencies becoming ETFs. With centralized exchanges already existing, many are opposed to a centralized exchange controlled by Wall Street while others believe there are possible benefits to it. ETFs can even decrease the level of volatility for cryptocurrencies as more investors come into play, but many believe that will only create challenges for independent exchanges and cryptocurrency businesses.

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