Bitcoin index funds: Should Grayscale be worried?

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center]Bitcoin index funds: Should Grayscale be worried?[/center]

2020 has been an incredible year for many firms trying to incorporate Bitcoin into their larger financial systems. Grayscale took the leap first, in the minds of many, with Coinshares and Bitwise making noise as well. These Crypto-Index Funds are regulated and their main focus has been the market’s institutional investors.

For context, Grayscale currently holds over 2% of the total Bitcoin in circulation, and it is extremely appealing for investors that do not want to hold Bitcoin directly and purchase through an IRA or brokerage account.

However, there are certain downsides and in this article, we will try to figure out if these crypto-index funds might face any competition in the future

Bitcoin as an asset is based on the foundations of being decentralized, away from anyone’s control. Hence, these regulated crypto-trusts kind of take the idea of holding Bitcoin in a different direction for the market’s investors.

Now, even though the likes of Grayscale, Bitwise, and Coinshares are sizable businesses, these corporations fall under the extremities of the prevailing regulations. Ergo, they are not tradable on major exchanges. So, it is basically holding Bitcoin, which is harder to access and possibly less liquid due to its untradable nature.

In light of the complications around regulated crypto-funds, the rise of DeFi and its financial products might have a lot to say down the years.


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