BTC ETF: WTF?
The press has been relentless reporting the continued rejection of Bitcoin ETFs lately, and many pundits are saying the price drops that have been taking place are directly related to these ETFs being rejected.
While ETF adoption is pretty much inevitable, old school Bitcoiners aren’t worried about it one way or another. Bitcoin was created during a time of massive distrust in Wall Street, making many of the original enthusiasts ambivalent about their involvement. On the other hand, a Bitcoin ETF increases demand for BTC, helps raise the price, and lower volatility.
And long term, every Bitcoin holder wants to see the price rise and volatility reduced.
What is an ETF?
Here’s a basic question we need to ask ourselves: what is an ETF?
The answer, of course, is that an ETF is a bundle of securities traded on financial exchanges and used as investment vehicles that are more liquid than mutual funds. ETFs allow investors easy access to almost every market: from market indexes, to various commodities, to meta bets, such as volatility, ETFs exist that track the price of nearly everything.
Except, that is, cryptocurrency.
Does Bitcoin not having an ETF really matter? I know, I know, it would be nice for another 2017, where everyone already holding Bitcoin watches their investment go 10x in a year. I want that too. Maybe it’ll happen again. Maybe not.
Bitcoin is still amazing. Lightning network has been increasing the capability of the blockchain. Ethereum dApps continue to be “buidl’d”, and Ethereum even Elon Musk wants some:
The Future We Make
Bitcoin and Ethereum don’t need an ETF. Bitcoin and Ethereum, and other cryptocurrencies, are programmable money. ICOs already exist that give users the ability to make baskets of tokens, and as these develop and integrate with existing structures, the desire for the blessing of an official ETF will wane.
In other words, both BTC and ETH can be held by anyone without having to use intermediaries taking a percentage for custody and overhead.
This is the huge benefit that cryptocurrency has over traditional assets. Gold needs an ETF to be traded instantly online. Bitcoin does not.
Currently, much of the pent up demand for a bitcoin ETF is due to the fact that holding crypto is perceived to be risky, difficult and/or a grey area from a compliance perspective. An ETF is an easy out for institutions.
ETF or not, it is likely more brokerages online will offer Bitcoin and Ethereum, as well as other cryptocurrencies, as a product to invest in. The problem is that while cryptocurrency can be traded online instantly and securely, it requires technical mastery to do it flawlessly and securely. Which is why we built the Hedge platform. If any broker can securely, compliantly, and easily transact in any cryptocurrency the need for ETFs is greatly reduced.
Solutions are already on the way, such as Robinhood’s cryptocurrency platform, although best practices will allow for easier access to one’s private keys and assets…24/7.
We’re not quite there yet, because the infrastructure to support this is still being built. But the number of dApps being built on Ethereum, and Bitcoin’s first mover/no inflation advantage, mean we’re not far from mass consumer adoption of blockchain tokens and cryptocurrencies that will feel seamlessly integrated into our current system.
And Hedge is working hard to create a software solution that will be the backbone of many future (and present) platforms.
Why buy an ETF when you’ll buy your BTC/ETH basket directly from your online broker?
What Hedge Offers
Hedge leads the industry in providing secure wallets with proprietary best in class distributed cold storage practices. The keys to your funds never touch the internet and cannot be stolen by hackers. There is no single point of failure that can jeopardize your fiduciary.
Hedge offers application interface solutions to make your apps work with our apps. Small regional bank looking to compete? Incorporate Hedge’s APIs into your app and give your customers the ability to buy and sell bitcoin through your institution.
Hedge is the only firm in the industry that gives you 24/7 access to your funds. We net settle transactions in a proprietary process that maintains the safety of keys in cold storage, but with near real time trading.
Let Hedge manage blockchains; you manage your clients.