Bitcoin ETFs: Bringing the Investment Discussion Back

The Security and Exchange Commission’s approval of several exchange-traded funds tied to bitcoin led to a sigh of relief in the cryptocurrency industry. Indeed, the move—which came after the regulatory agency lost in court—is being seen as a victory for a nascent space. But regulators still have their doubts, and other cryptocurrencies still have long journeys to being folded into the world of traditional financial products. 

This Javelin Strategy & Research report lays out the possibilities and the hurdles. Although bitcoin ETFs give retail and institutional investors the opportunity to invest in bitcoin-backed holdings without actually having to handle the cryptocurrency, their continued growth—and being eventually joined by other crypto-backed funds—will require advancements in technology, risk management tools, infrastructure, and financial services talent.

Key questions discussed in this report: 

• How will the approved spot bitcoin ETF affect demand? 
• What opportunities will arise from the approved ETF milestone? 
• What are the risks associated, directly or indirectly, with the bitcoin ETFs?

Companies Mentioned: 

Bitwise, Blackrock, Bloomberg, Coindesk, Fidelity, Franklin Templeton, Global X, Grayscale, Hashdex, Invesco, Securities and Exchange Commission, Valkyrie, VanEck, Wall Street Journal, WisdomTree