Bitcoin & Co: When will crypto ETFs finally arrive?

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Bitcoin Futures trading began in late 2017, raising hopes that it would now be a quick blow. Experts dreamed that cryptocurrencies would soon be bundled with funds. The move to the regular market would have opened up completely new possibilities. A good six months after the Bitcoin Futures start trading, there is not much left of this euphoria. There has been no passage of digital currencies through the instances. Rather, the prices have plummeted so spectacularly that critical voices prophesied the end of Bitcoin and Blockchain.

These critics were happy too soon. From its historic high, the Bitcoin is still miles away. And given the still high frequency with which ICOs are announced, even the blockchain is far from whistling “from the last hole”.

On the contrary, a look at the overall picture reveals that there is a tendency for some old coins to see more stable uptrends. Examples are Ripple or Bitcoin Cash. Both have felt the break at the turn of the year 2017/2018 very clearly, but could very quickly turn back in the opposite direction. Why are investors still lacking alternatives to the direct acquisition of cryptocurrencies?

Listed papers must overcome hurdles

Cryptocurrencies want to break away from traditional financial instruments. This disconnection is reflected in the fact that Bitcoin and Co. (as a rule) do not have a central administrative and supervisory body. While central or emergency banks are fiat money supervisors par excellence, participants in the crypto coin networks normally operate on an equal footing.

Maybe it’s the lack of control that gets in the way of digital currencies. There is no denying the will to launch products such as crypto ETFs. On the contrary: In the past, multiple providers have tried to hang up appropriate papers. However, this intention failed so far at the supervisory authorities.

Exchange traded funds need their blessing. And this was not available yet. Or better, US regulatory concerns have put several potential ETFs on hold earlier this year. The effort to establish exchange-traded funds in the market may have been a damper. However, corresponding ideas can no longer be eliminated from the world. In recent days, several providers have announced according to funds.

Crypto coin ETF vs. Blockchain ETF

Again and again, the debate focuses heavily on the currencies themselves. There are now approaches and ideas that prefer a more indirect participation in the markets. These include CFDs on the one hand. These are traded by brokers specializing in CFDs.

A second interesting approach is so-called Blockchain ETFs / funds. This is about the hardware — ie companies that are located around the blockchain. An example of this group is the Amplifiy Transformational Data Sharing ETF. The basic concept is investment in companies that promote and deploy blockchain technology. That’s why papers like HIVE Blockchain Technologies appear alongside Microsoft or Nvidia and SAP in the portfolio.

By focusing on hardware, Blockchain ETFs are easier to accept. Because of the debate surrounding BTC ETFs, they will eventually come. In markets with liberal supervision, it is already happening. But every investor has to wonder if the crypto ETFs even fit into their own portfolio. The strong focus on digital currencies creates a lump risk, which every trader must keep an eye on.

Without looking at details, this segment will not work. The “greed eats brain” mentality is ultimately also in the cryptocurrencies something that is actually completely inappropriate.

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