Cryptocurrency ETFs

Main article: Cryptocurrencies

Advantages of cryptocurrency ETFs

For mid-2022, cryptocurrency ETFs are only a nascent asset class, but they could be one of the best tools for investment. The main advantage of the ETF includes free access to cryptocurrency assets without additional costs, because the actual ownership of cryptocurrencies entails additional costs. Storage fees, for example - some secure digital cryptocurrency storage wallets charge an annual fee, and those fees can add up to a decent amount.

Cryptocurrency ownership and trading are also linked to other payments, such as transactional and network fees. ETF providers are actually taking on these costs. Thus, this asset class has certain advantages.

Cryptocurrency ETFs in Russia

2022: Distrust of ETFs after stopping trading them on the Moscow Exchange with the start of a special operation of the Russian Armed Forces in Ukraine

As of July 2022, investors are unlikely to see exchange-traded investment funds dedicated to cryptocurrency in Russia in the near future. The first reason is the lack of specifics in the field of regulation of the crypto industry at the state level, despite all the heated debate and work on the bill. The second reason is a drop in confidence in the ETF as a whole, especially since the suspension of trading on the Moscow Exchange on February 28, 2022 after the start of Russia's special operation in Ukraine.

In early June, the largest player in the Russian market, FinEx, announced the closure of one of the funds, which caused unrest in the investor environment: the attitude towards ETFs is unlikely to be positive in the near future.

At the same time, Russia is among the states with the greatest penetration of cryptocurrencies into the general population: according to various sources, from 10 to 12 million people own cryptocurrency. Earlier, Russian Prime Minister Mikhail Mishustin indicated that the Russians invested up to 10 trillion rubles in cryptocurrency. It is likely that with the return of confidence in exchange-traded investment funds, Russians will begin to invest in cryptocurrency ETFs.

Chronicle

2022: Will cryptocurrency ETFs become popular with investors?

The number of exchange-traded investment funds (ETFs) backed by cryptocurrency is gradually growing and could be another peculiar 'bridge' for investors to enter the market. While authorities from around the world are leisurely considering bills to regulate cryptocurrencies in mid-2022, large funds investing in digital currencies are seeking to launch ETFs in various jurisdictions.

The first attempts to legalize the crypto ETF began back in 2014 by the Winklevoss brothers, but only in October 2021 the first approval of a cryptocurrency-related ETF took place in the United States. As of the beginning of June 2022, the largest bitcoin ETFs can be attributed to

• ProShares Bitcoin Strategy ETF (BITO); assets under management: $1 billion;
• Valkyrie Bitcoin Strategy ETF (BTF); assets under management: $36 million;
• VanEck Bitcoin Strategy ETF (XBTF); assets under management: $18 million.

The last high-profile project can be called the Grayscale Future of Finance UCITS ETF, which has planned to create the largest investment fund Grayscale. The project is planned to be launched on the European market - on the London Stock Exchange (LSE), Borsa Italiana and Deutsche Börse Xetra under the ticker symbol GFOF. It is worth noting that earlier in February 2022, Grayscale had already applied for a similar exchange-traded fund in the United States, with the same index. But this is far from the only major project of 2022: Huobi Technology - a project owned by the Huobi Global crypto exchange, registered in Hong Kong, provides cloud SaaS services in the field of blockchain and digital assets, also plans to launch ETF, but in the jurisdiction of Hong Kong. The company is already in talks with the Hong Kong Securities and Futures Commission (SFC) and plans to structure the fund in such a way that investments are available to retail investors as well. The decision is no coincidence: as of July 2022, Hong Kong crypto exchanges are only allowed to serve professional investors. It is possible that after the approval of the ETF, retail investors from Hong Kong will feel freer in opportunities.

Despite the turbulent situation in the markets in May 2022, the relatively successful launch of the first traded Bitcoin and Ethereum funds in Australia's jurisdiction took place. Securities and Derivatives Exchange Cboe Australia has presented new offers - ETFS 21Shares Bitcoin ETF, ETFS 21Shares Ethereum ETF, as well as Cosmos Purpose Bitcoin Access ETF. Experts agree that the popularity of these funds will grow with the return of bullish sentiment in the cryptocurrency market.

The US Securities and Exchange Commission (SEC) has already approved eight cryptocurrency ETFs for trading - a considerable number of applications are still under consideration. It is worth noting that the thaw in relation to exchange-traded investment funds related to cryptocurrency began with the arrival of a new chairman to the SEC leadership in 2021 - it was the former head of the Commodity Futures Trading Commission (CFTC) Gary Gensler, who is well acquainted with blockchain technology.

2021: Goldman Sachs launches exchange-traded fund with shares of cryptocurrency companies

At the end of July 2021, Goldman Sachs announced plans to launch an exchange-traded fund (ETF) focused on companies developing technologies in the field of DeFi and blockchain. Read more here.