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By Jack Pearson
An ETF, or exchange-traded fund, is a financial instrument used to track the performance of traditional assets – here we list the best options for Bitcoin and crypto ETFs currently on the market
Investment firms have started offering ETF products for Bitcoin as the world’s leading cryptocurrency has earned the position of something that’s here to stay and, so far, has proven its critics wrong on the question of its longevity. The US SEC has shown some hostility towards Bitcoin in the past, having rejected numerous Bitcoin ETFs since 2017, and is unlikely to approve a Bitcoin ETF until the cryptography further proves itself to the committee’s satisfaction.
As Bitcoin and cryptocurrencies increasingly appear on the radar of investors from traditional trading backgrounds, products such as ETFs will encourage them to invest in cryptocurrency without competing with wallets, withdrawals, deposits and the volatility of crypto markets.
However, concerns about price manipulation of digital assets have prevented the emergence of a fully regulated product so far.
Here we list the top 3 Bitcoin ETFS of 2020 that we believe will prove their worth in 2021.
Bermuda Stock Exchange ETF
The world’s first Bitcoin ETF product was launched in Bermuda. After the US SEC repeatedly blocked requests for Bitcoin ETFs, the Bermuda Exchange (BSX) launched its exchange on September 18, 2020.
The fund tracks a “portfolio of blockchain-based cryptocurrencies and assets that are tracked by the index”.
Up to 3 million Class E shares will reportedly be available for trade, although it has not been made clear which cryptocurrencies are tracked by the fund. The shares will cost $ 1,000 each, so this may not be suitable for those who don’t have the capital to take the risk and invest in the fund.
Hashdex CEO Marcelo Sampario said Bermuda was selected due to its cryptocurrency friendly regulatory environment and that the ETF “will accelerate the entry of institutional investors into this segment. It is a trend that is becoming more and more concrete “.
Gibraltar Stock Exchange
The other recent addition to Bitcoin ET’s potentially growing list is that of the Gibraltar Stock Exchange. Called “The Bitcoin Fund”, this ETF is aimed at established investors based in Europe, according to BTC Times.
First launched in Canada, where the ETF is currently trading, the fund will now be a source of investment for European investors interested in the current instability of the global economy and rising inflation as Covid continues to have a impact on the global economy.
Furthermore, the fund facilitates the entry of investors who wish to expose some of their portfolios to the growing cryptocurrency market without having to navigate using hardware wallets or manage private and public keys.
3iQ, the fund’s issuer on the Gibraltar Stock Exchange, says the ETF is one of the first regulated Bitcoin ETFs in the world to arrive at a fully regulated exchange in Europe. 3iQ CEO Fred Pye said this opens the door for sovereign wealth and pension funds who want to access a fully regulated Bitcoin product that offers some security for investments outside the wild west of the cryptocurrency market.
Pye added that: “Being listed on the Gibraltar Stock Exchange extends the reach of the Bitcoin Fund within the burgeoning European digital asset market and continues the wave of momentum that defined 3iQ’s exciting progress during the first half of 2020. “.
Greyscale’s Investment Trust
While not strictly an ETF, this fund deserves a mention. Greyscale has made headlines in recent weeks for its purchase of cryptocurrencies to add to its reserves and AUM (asset under management)
The grayscale is currently valid a staggering $ 10.4 billion AUM in crypto holdings – just over a year ago in December 2019, the company only held $ 1 billion in AUM to put that into perspective.
Some of these gains have been due to the rise in the cryptocurrency market, but the accumulation made by the company is still nothing short of impressive.
Investing in trust means that investors can benefit from a stock rather than direct exposure to cryptocurrency markets.
Of its offered products, Grayscale Bitcoin Trust (GBTC) remains the most popular for now.
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