The Swiss crypto-ETP will lead to the approval of bitcoin ETF?

[Paha87]

This week, SIX Swiss Exchange, Switzerland's main stock exchange, approved the listing of products sold using cryptocurrency exchange (ETP) based on cryptocurrency.

Like the Coinbase index, Amum's crypto-ETP represents the value of five cryptocurrencies, including bitcoin (BTC), Ripple (XRP), Litecoin (LTC), Bitcoin Cash (BCH), and Ethereum (ETH). Thus, investors who invest in Cresta ETP Amun, acquire a basket of cryptocurrencies, which meet the requirements and criteria to be submitted to regulated investment companies.

The company explained:

Unlike real assets such as stocks or gold, the index does not have its own price, but displays a value representing the prices of the underlying asset group, according to its own calculation methodology. For example, S&p 500 is calculated by taking the amount of adjusted market capitalization of all shares of the index, and then dividing it by the value, which is a fixed figure developed by Standard & Poor's.

Whether the ETP will increase the probability of making a bitcoin-ETF?

The short answer is no.  Amum's crypto-ETP is conceptually similar to an exchange-traded Fund (ETF) in the sense that it allows both institutional investors and accredited retail traders to invest in digital assets without the need for asset retention and regulatory compliance.

Trading on the SIX Swiss Exchange, HODL ETP will act the same way as for a regular stock list allowing investors to buy and sell shares to indirectly invest in the cryptocurrency market.

Bitcoin ETF

While the endorsement of the crypto-ETP on the primary stock exchange of Switzerland is a positive milestone in the industry, ETP already exists on the American market in the form of the investment Fund Bitcoin Investment Grayscale and investors in the local market may purchase investment funds which represent the price of BTC.

In July, the U.S. securities and exchange Commission (SEC) rejected a proposal to create a bitcoin ETF put forward by the Winklevoss twins, who filed an application on behalf of Gemini's own regulated exchange. At the time, the regulator clarified that "the cryptocurrency exchange market is not Mature enough for ETFs."

In August, eight more ETF bids were filed by ProShares and two other companies, which are based on the BTC price in the futures market, trying to avoid the winklevoss brothers ' directness. However, these eight ETFs have also been rejected by the SEC, and the regulator has firmly stated that "the futures market is not of significant size to provide the underlying value of BTC."

Lawyer from Kobre & Kim Jake Chervinsky said:

ProShares and other ETFs have tried to address this issue by valuing bitcoin through the respected, regulated CBOE and CME futures markets. Theoretically, this provided the ETF supported derivative financial instruments more likely to be accepted than stock ETFs, which use the unregulated spot markets. However, the SEC found that the futures markets for bitcoin do not have a significant size, as in the case of the application from the Winklevoss brothers.

What must happen to approve the bitcoin ETF?

To increase the likelihood of bitcoin-ETF approval, companies turning to the SEC must offer a convincing solution to the problem - the cryptocurrency market and the futures market are insufficient to determine the real price of BTC.

Some believe that the launch of the Bakkt futures market could convince the SEC of the possibility of using the ETF futures market, but the potential impact of Bakkt on the crypto sector remains unknown.


Link to the source of information (Russian) - https://altstake.io/news/shveycarskiy-kripto-etp-privedet-k-odobreniyubitkoin-etf