A Bitcoin Exchange-Traded Fund has been at a decision away for almost 4 years, but things might be looking sweet for cryptocurrency traders because an ETF might be just around the corner, says CCN.
Cathie Wood, chief executive officer of ARK Investment Management, said that a Bitcoin Exchange-Traded Fund is there and will take two years to hatch, but will also need some kind of education, to let people know what they’re dealing with.
Investors will benefits the most if this becomes reality
The proposed Bitcoin fund will allow investors to trade in financial securities tied to bitcoins without necessarily owning cryptocurrencies.
Let’s take ARK Innovation ETF for example, a company which operates the first U.S cryptocurrency exchange-traded fund and that’s playing into the cryptocurrencies field through the Bitcoin Investment Trust (an investment vehicle that allows investment in bitcoins, deriving its value from the price of bitcoin). BITs are turned into GBTCs and sold to underlying investment fund, after a one-year holding period condition.
GBTC grants investors a titled and audible ownership, so it’s more profitable than to buy bitcoins directly. Also, investors benefit from a network of trusted service providers.
Ok, but how about the CEFs?
For those unfamiliar with a Closed-ended Fund (CEF), it operates similarly to ETFs, but is not an ETF. It raises capital through initial public offering (IPO), yet it does not trade shares on the daily, but on an exchange with the market establishing the price. This means that the capital in CEFs doesn’t produce a regular flow.
Another main difference between ETFs and CEFs is that the first ones offer a special creation feature that acts like a safe boat against a considerable stray from the net asset value.
The next step towards a Bitcoin ETF is a regulated ecosystem for cryptocurrencies, one that can be brought by the Securities Exchange Commission, thinks Cathie Wood.