On the other hand, ETFs facilitate entry into the cryptoasset market for institutional investors, which thus has an alternative to futures ETFs that they can use until now. The participation of institutional investors is essential to provide the liquidity needed in the cryptoasset market, to facilitate buying and selling operations and to maintain price balance.
In addition, these new investment vehicles will simplify bitcoin trading for retail investors, which avoids the complexities associated with direct cryptocurrency purchases. “ETFs eliminate barriers to entry by allowing individual investors to not have to operate cryptocurrency exchange platforms, known as ‘exchanges’, or direct custody management. In addition, the cost structure is more competitive and hypothetically they have more liquidity, especially ETFs with more assets under management,” he explained. Andres Fondevilahead of Digital Assets at BBVA Asset Management.
The announcement can also lead to relevant changes for traditional cryptoasset operations, which until now has only been done through ‘exchange’. These cryptocurrency exchange platforms and the collection of commissions that make up their main income are not subject to regulation. “The appearance of ETFs with commissions between 0.30 and 0.90 basis points makes them more attractive and should provoke a review of the commission structure of the exchanges,” explained Andrés Fondevila.
The bitcoin ETFs approved by the SEC in the United States added to the physically backed vehicles already available in Europe, thus introducing cryptoassets to the traditional financial market and representing a new step in the journey towards regulation, which will provide the digital asset. ecosystem is the strength that experts demand.