Though it offers retail investors a novel channel for cryptocurrency exposure — and one that may seem less risky than buying it directly — it’s more of an evolutionary step than a revolutionary one.
“BITO will open up exposure to Bitcoin to a large segment of investors who have a brokerage account and are comfortable buying stocks and ETFs, but do not desire to go through the hassle and learning curve of establishing another account with a cryptocurrency provider,” ProShares CEO Michael L.
Though the regulatory environment for Bitcoin and cryptocurrency remains murky, the Securities and Exchange Commission’s approval of ProShares’ ETF shines some light on how it’s thinking.
In this case, the ETF is actually tracking a futures contract — an agreement to buy or sell an asset in the future at a specific price — and the asset is Bitcoin.
“The new Bitcoin ETF will not hold any actual Bitcoins but will rather model the price of Bitcoin using futures contracts and other short-term financial instruments,” said Dr.
The fact that the SEC didn’t raise any objections bodes well for future innovation in the cryptocurrency space,” said Dr.
The launch of ProShares’s ETF could mark a turning point in how the SEC approaches regulating crypto-related securities.
“The US government must adopt a new set of regulatory policies that embrace the future and encourage innovation,” said Dr.