By Shelly Melancon (Switzerland)
We are, indeed, living in the most exciting crypto era yet; the rate of growth of the crypto industry, as well as the increasing rate of acceptance by governments, is encouraging. The United States has now approved the listing of several crypto-ETFs on stock exchanges. And now, the first cryptocurrency-related exchange-traded products (ETPs) are gaining traction. NYSE ARCA, a subsidiary group of the NYSE, has announced its intentions to register and list an ETP Trust that is based on Bitcoin. The proposal has been submitted and is now awaiting confirmation from the SEC. If it gets approved, it would be the world’s first Bitcoin-ETP.
The NYSE Arca had submitted a rule-change proposal to the SEC. In the proposal, it wants approval to list shares of Bitwise ETP Trust. The proposal also listed conditions in line with the SEC regulation on the listing of publicly traded assets. It said that the shares would allow investors to get the value of BTC that they are investing in and also listed the Trustees.
What Next?
Upon approval from the SEC, the Trust will ensure that it always holds the right amount of bitcoin per share by processing every fee in bitcoin instead of fiat. The proposed listing price per share is $25 and the Trust will release an initial 1000 shares.
Once the shares are listed, trading will be regulated and carefully monitored. There are suggestions that the Bitcoin-ETP will be studied to draw lessons and plans for similar projects in the future.
The company initially applied to the SEC in January 2019 for a Bitcoin exchange-traded fund (ETF) registration, but the application was later withdrawn due to SEC concerns. The SEC is expected to announce its decision within the next 45 days as required by the law. If the proposal is not approved, the company can file another proposal which must show clear differences from the rejected one.
The Rise of ETFs and ETPs Will Improve the Crypto Industry
The cryptocurrency industry is expected to benefit as more people become acquainted with cryptocurrencies through the regulated stock market. With the rise of crypto ETFs and ETPs, investors will have a safer way to trade the crypto market without owning any digital assets or being exposed to the associated risks. It is expected that the stock market’s regulations will apply to these new crypto-based instruments.
The difficulty in regulating the crypto market has been a source of concern for the government, and it is possible that this is the primary reason why the SEC and other regulatory agencies have been hesitant to approve pure bitcoin contracts on the stock market. It is widely acknowledged that the adoption of digital currencies is imminent; some may even argue that it is unavoidable. However, the government has the final say on which crypto-based assets and instruments are listed on stock exchanges.
Once regulatory terms are agreed upon and implemented, there would be few obstacles to stop the fastest-ever adoption of cryptocurrencies. And as blockchain rolls out new features, the industry can only get better.
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