Unlike its southern neighbor, which is still lagging behind, Canada appears to be tracking cryptocurrencies fast – which became evident again last week in the regulatory green light for three new ETHs-based ETFs, the first in the North. USA. …
“Ease of access to ETF in Canada changes the competitive landscape,” Campbell Harvey, professor of international business at Duke University’s Fuqua School of Business, told Cointelegraph. Harvey said the US Securities and Exchange Commission will feel the pressure to approve a cryptocurrency ETF soon, possibly in a few months.
He explained that eliminating cryptocurrencies has become more and more difficult, adding: “Think of an institutional investor looking for a well-diversified portfolio. Of course, this portfolio will include companies like Apple with a market value of $ 2 trillion. What about a cryptocurrency?”
On April 17th, Purpose Investments, Evolve ETFs and CI Global Asset Management were approved by the Canadian regulators to launch the Ether ETF. This incident, while viewed by most positively, still raises many questions.
How is ETF Ethereum different from ETF Bitcoin (BTC), if any? Will it have the same target market or the same success in managed assets as the Purpose Bitcoin ETF, which has raised $ 1.23 billion ($ 983 million) since its February debut? If so, how important is cryptocurrency ETFs as a class – is it only halfway to the widespread adoption of cryptocurrency that is likely to be replaced by decentralized financial offerings?
Chris Kaeper, vice president of CFRA, an analytics and research firm, told Cointelegraph that private and institutional investors alike prefer to make investments in cryptocurrencies with “market value weighted” rather than trying to pick winners and losers. So the ETF for Ether, the second largest cryptocurrency, is a plus and “will allow them to start building this wallet.”
Kuiper added that BTC and ETH may also differ in different directions, and ultimately Ether could attract its own unique audience. Ultimately, “many [investors] are starting to see Bitcoin as a tier of cash or Gold 2.0 and even as an alternative to group equity reserves,” Kuiper noted, explaining this to those who see Bitcoin as the “best vault”. Values, they “want the symbol to not change and transactions to be slow”. he added:
However, Ethereum spokespeople are exploring Ethereum’s potential for programmable contracts, i.e. smart tokens, and building all kinds of applications on top of Ethereum. […] This is a completely different view, and these investors may not be interested in Bitcoin, but they may have a keen interest in the influence of Ethereum as a kind of new platform. ”
Purpose Investments CEO Seif appears to have seen wider use of the Ether ETF, for example, as a way to invest in a technology platform. He recently commented: “We are working to democratize access to ether, making the process of owning ether easier than ever. We believe that ether […] is ready to continue its growth and will be an important technical tool and a wider application as an investment resource.”
Geoff Dorman, chief investment officer at investment management firm Arca, told Cointelegraph that most investors today still don’t understand – and often don’t even know – Ethereum and how it differs from Bitcoin. At the same time, the market audience of BTC and ETH listed funds is basically the same, in his view, that is, “those who are more limited in their ability to directly purchase digital assets.” This includes financial advisors and mutual funds.
Will the Ether ETF perform like BTC’s cousin?
As mentioned, the purpose of the Bitcoin ETF is a huge hit with most users. Will the Ether ETF get the same attention?
Kuiper expects the Purpose Investments Ether ETF “will also succeed in acquiring the assets, but I did not expect it to receive the same amount of assets as the Bitcoin ETF.” Bitcoin remains the main cryptocurrency, and although its dominance has diminished recently, it still accounts for around 50% of the total market capitalization. Ether, in second place, lags far behind and accounts for only 12% to 13% of market share. You can expect the same ratios to be applied to the ETFs involved, Kuiper said, adding:
“If you look at something like the Grayscale Trust in the US, Bitcoin managed assets are over $ 40 billion and Ethereum is just under $ 8 billion – or about five o’clock.