A Bitcoin ETF is a partly longed-for investment vehicle in the crypto community. It is intended to flush big money into the ecosystem and attract institutional investors. Now SEC Chairman Jay Clayton commented on the issue.
Jay Clayton, chairman of the US Securities and Exchange Commission, commented on 26 November on a hotly debated topic in the crypto community:
Bitcoin trader ETFs
They have the reputation of radiating security for potential investors – and thus luring new money into the Bitcoin trader market. Exchange-traded funds are investment funds that track indices and have the same price trend as the underlying index (in this case Bitcoin). This means that investors can ultimately benefit from a performance without fearing a scam and actually having to buy the asset in question. In short, a Bitcoin ETF would greatly simplify investment in crypto currencies.
The question as to whether the Securities and Exchange Commission has finally agreed to allow ETFs has been a concern for the community for some time now. Only in November did VanEck say that all the conditions for admission had already been met. So far, however, no one has heard anything more about an approval. This should come as no surprise, as the SEC’s list of questions is quite long. With a decentralised technology and a more or less unregulated market environment, it is not necessarily easy to monitor or prevent things such as liquidity, custody, arbitrage and manipulation.
Bitcoin ETF: Security concerns still predominate crypto trader
In this context, Jay Clayton also expressed concerns about the crypto trader funds. According to Bloomberg he said that crypto currencies are still not protected against theft and/or can be manipulated: Crypto Trader Review 2018 » Full Scam Check
“What investors expect is that the trade […] underlying the ETF is a meaningful trade that is free […] from the significant risk of manipulation. This type of protection does not exist in many of the markets where digital currencies are traded”.
Thus, Bitcoin ETFs are unlikely to be approved in the near future. Considering the current situation around Exchanges, one can understand Clayton’s concerns. The debate over Bitfinex and the alleged manipulation of Tether alone are not necessarily evidence of a safe ecosystem. Also the Causa Envion leaves so some hurt investors behind.
What one must not overlook here, however, is that it is the stock exchanges and other middlemen who are not (always) safe. The Bitcoin blockchain itself is difficult to crack.