The ETF Prime podcast has officially partnered with ETF Trends and ETF Database, and on this week’s episode, host Nate Geraci is joined by ETF Trends Managing Editor Lara Crigger. For this kick-off of sorts, she examines the various theories on why the SEC is delaying Bitcoin ETFs’ approval. Crigger also offers a brief update on the space.
Additionally, OpenInvest’s Jake Raden discusses the merits of direct indexing and an ESG approach to investing. Furthermore, HoneyTree’s Liz Simmie explains the importance of integrating ESG data into the investment process, highlighting the Canadian ETF landscape.
Looking at Crigger’s thoughts on Bitcoin specifically, the SEC has attempted to highlight potential issues regarding security. For Crigger, it does come down to the control the governmental agency exercises. If politicians aren’t willing to get into the crypto game, it makes things more challenging.
With that said, those in charge are looking to experts to provide them with guidance, which will ideally dispel various theories critical of the cryptocurrency. Still, according to Crigger, skepticism from politicians and regulators should be warranted.
Regulators, Mount Up!
Crigger states: “It feels like crypto has been around forever, but the truth is it’s still a very new asset class. The SEC only really agreed on what kind of asset it was, from a regulatory perspective, just a few years ago. When you compare that to other commodities, like corn and oil, we’ve had these markets for over a hundred years. The supply and demand fundamentals that drive them, the liquidity times the stress, the natural rhythm and flow of volatility – that’s all really well understood in those markets.”
She continues to say that “however, in bitcoin and in other cryptocurrencies, they’ve evolved so quickly, that they don’t have that same track record, you can look what’s happened over the past 5 or 10 years, but that’s a blink compared to other commodities.”
In an inherently fractured market, it is easy to understand why there is such hesitancy to recognize and approve a Bitcoin ETF. On top of that, Crigger proposes a key question: “should it be the job of our regulators to create a market, or should it be their job to regulate the markets that exist?”
How can an agency designed to regulate traditional investments approach an investment vehicle that is anything but traditional?
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