The crypto market continuously witnesses volatile and dynamic events in the crypto space, and joining the new wave is an Exchange Traded Fund (ETF). ETF is a form of fund or security that trails and follows commodity, index, sector, or any other asset purchased or sold on a stock exchange like traditional stocks. ETFs can be designed, regulated, and constructed for the purpose of tracking specific investment strategies, price of an individual commodity, large and diverse collection of securities. On similar lines, the combination of the cryptocurrency world and Exchange Traded Fund is Bitcoin ETF.
The Bitcoin ETF is nothing but a form of ETF that is formed and structured for tracking Bitcoin’s (BTC’s) securities, strategies, price, investments, and so on. The seed of Bitcoin ETF germinated due to the rising demand of unregularized market capitalization of cryptocurrencies investments, especially Bitcoin. Bitcoin ETFs track the value of Bitcoin and its trading on conventional market exchanges, where investors or users can, without the help of traders or agents, directly buy or sell the digital asset on a cryptocurrency trading exchange.
Last month this year in Canada was the first-ever Bitcoin ETF named – The Purpose Bitcoin ETF launched on the Toronto Stock Exchange, and within a month after the launch, it has struck the USD 1 billion index in assets under management (AUM). Following this example lot of other companies all over the have applied for Bitcoin ETF’s in their respective Security Exchange Boards. Like, Brazilian Securities and Exchange Commission last week approved and listed the first Brazilian Bitcoin ETF, and few others are in the pipeline. Likewise, a US-based financial services giant, Galaxy Digital, has filed an application with the US regulators – Securities and Exchange Commission (SEC) for a Bitcoin Exchange-Traded Fund (ETF). Other than Galaxy, the United States SEC is already evaluating and considering applications from seven other companies. Galaxy Digital is formally and publicly listed on the Toronto Stock Exchange and is currently in the process of getting a US listing along with Bitcoin ETF. Like VanEck, Fidelity, WisdomTree, Kryptoin, and so on, major US-based companies are in this queue.
Earlier, the SEC had rejected several Bitcoin ETF applications partially due to the rigid market policies towards digital assets and investors’ interests. Despite previous factors, more flexibility in the system and more new favorable legislation allow these applications to be looked at favorably and assessed.
These actions denote the surge of investors’ growing interests in the Bitcoin ETF as an investment option in the US market. The US Bitcoin market has experienced huge growth in the current few months. It now has the interest of some big institutions, and others seek Bitcoin ETFs-based regulatory approval.