Why the World Needs a Place Bitcoin ETF in the US: 21Shares CEO Explains

Despite the growing adoption of various cryptocurrency exchange-traded funds (ETFs) around the world, the global trading community continues to ask one question: When will a spot Bitcoin (BTC) ETF go live in the United States?

According to some ETF analysts, a spot Bitcoin ETF could become real in mid-2023, after years of rejection by the US Securities and Exchange Commission (SEC). Despite the SEC’s apparent reluctance to allow such a product, industry players like Grayscale continue to actively push for a spot BTC ETF.

There are quite a few reasons why a potential SEC approval of a spot Bitcoin ETF remains one of the most anticipated events in the community.

21Shares CEO Hany Rashwan believes a spot Bitcoin ETF would open up the crypto market to institutional and retail investors currently barred from participating in the digital asset space.

“Institutionally, investors are locked out due to investment restrictions and regulatory uncertainty,” the CEO told Cointelegraph in an interview.

“For retail investors who are less tech-savvy, the main hurdles to investing directly in crypto are creating a wallet and trading on exchanges and platforms with which they are unfamiliar. Accessing crypto by investing in an ETF would solve these problems,” Rashwan said.

He pointed out that the new asset class carries certain risks, but “This is exactly the same for other products.”

One of the main differences between holding cryptocurrencies versus crypto ETFs is that investors can buy and sell the ETF through a normal bank or broker in existing investment or trading portfolios, according to the 21Shares CEO. “You don’t need to create new accounts or wallets to hold the tokens,” Rashwan noted.

Total Assets Invested in Crypto ETFs Reaches $16.3 Billion

While the US SEC has not yet approved a pure Bitcoin ETF, such investment products are gaining popularity in other countries. Canada debuted its first-ever Bitcoin ETF, the Purpose Bitcoin ETF, in February 2021, becoming one of the first countries in the world to adopt a spot BTC ETF.

On May 12, Australia is expected to begin trading three new spot cryptocurrency ETFs, including a BTC ETF from Cosmos Asset Management and BTC and Ether (ETH) ETFs from 21Shares.

Aside from pure asset-based ETFs, there is also a wide variety of ETFs linked to asset derivatives such as futures or contracts that combine shares of major crypto industry companies.

Crypto ETFs are gaining popularity, with total assets invested in crypto ETFs and exchange-traded products (ETP) reaching $16.28 billion by the end of the first quarter, according to data collected by the ETF research firm ETFGI.

Related: SEC Approves Valkyrie’s Bitcoin Futures ETF

“We firmly believe that this growth will continue as more markets open up to crypto and Europe has been at the forefront of innovation and adoption of crypto ETFs,” stated the CEO of 21Shares, adding:

“The key lessons learned are that more and more investors view an allocation in crypto as an integral part of portfolio diversification and prefer to do so with ETFs for the reasons mentioned above: ease of access, cost-efficiency and transparency.”

Since launching one of its first crypto ETPs in 2018, 21Shares has launched a total of 31 crypto ETPs to date with listings on major exchanges in Frankfurt, Zurich, Paris, Amsterdam. The company has also attempted to launch a spot Bitcoin ETF in the United States and filed for the ETF at Ark Investment Management with the SEC in June 2021. The SEC officially rejected the application for the ETF on March 31.