Date: 10 months ago   Category: Economy

What is bitcoin-ETF and why they are contradictory?


A month ago the Commission of the USA on securities and the exchanges (SEC) has postponed the decision on bitcoin-ETF, and in several days will decide destiny of derivative tools again. In this article we in brief will explain that we such ETF what types of bitcoin-ETF happen what the problem with granting permission to bitcoin-ETF and what bitcoin-ETF consists in, most likely, will be resolved first of all.

A month ago the Commission of the USA on securities and the exchanges (SEC) has postponed the decision on bitcoin-ETF, and in several days will decide destiny of derivative tools again. In this article we in brief will explain that we such ETF what types of bitcoin-ETF happen what the problem with granting permission to bitcoin-ETF and what bitcoin-ETF consists in, most likely, will be resolved first of all.

That such ETF? Recently many tell

about creation of bitcoin-ETF. ETF (traded at the exchange fund) is a security which provides some basic assets. Stocks, bonds, goods or cryptocurrency can be these assets. The keeper (bank or other financial institution) bears responsibility for saving of assets of fund. Then actions which grant the property rights to these assets are issued.

What happen types of bitcoin-ETF

there Are two main types of bitcoin-ETF:

- ETF which represent "physical" coins of BTC, for example, VanEck/SolidX (it is supported by the Exchange of options of Chicago).

- ETF which submit Bitcoin-derivatives. These ETF don't own real coins, but sell bitcoin-futures, - options, - swaps, instruments of the monetary market and other investment tools. Two examples of ETF of bitcoin-derivatives are Direxion ETF and Proshares ETF. whether

at the beginning of August of SEC had to make the decision on that to allow VanEck/SolidX Bitcoin-ETF, but has postponed the decision, and in several days of the Commission it is necessary to decide destiny of Proshares Bitcoin-ETF. However, unlike VanEck/SolidX, SEC can't postpone this decision.

B than consists a problem with granting permission to bitcoin-ETF

ETF bargain at the exchanges, and it means that they bargain to similarly public capital. Standard requirements to the statement of ETF very strict as their listing at the exchange allows any to invest in them means. When SEC estimates the offered ETF, it considers how to minimize the conflict of interests, mistakes in tracking, manipulation and how to provide reasonable and corresponding disclosure of risks.

1. The main risk - loss of the assets transferred on custodian storage.

the Keeper of ETF can go bankrupt and not support ETF any more. In a case with coins is a special problem. Bitcoin, generally bargains at the unregulated international exchanges which risk to be cracked or to stop the activity. Besides, bitcoin is subject to strong volatility.

2. Opaque data sources.

is simpler to Reduce custodian risks after all, than risks of mistakes

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