If there’s one development which seems almost sure to catalyse the next bull run in the crypto markets it’s the introduction of crypto exchange-traded funds (ETFs). It’s expected that once established, the ETF market in crypto could account for some $3.4 trillion by enabling digital currencies to be traded on the global markets. Today’s news that the Securities and Exchange Commission (SEC) are proposing to remove some of the barriers to the establishment of ETFs will therefore be warmly welcomed.
As things stand, blockchain funds must apply for “exemptive relief” from the SEC, which enables them to operate outside the constraints of the Investment Company Act. But on June 28th a vote was passed which opens the door to allow at least some types of fund to be established without needing to be granted formal exemption.
To date, only blockchain funds have made the cut, with a series of proposals for crypto ETFs being refused. Amongst the reasons cited by the SEC for their blocking of the funds are a lack of liquidity in crypto markets and issues with price manipulation. Whilst these issues would still seem to be live in the crypto markets, today’s news seems to suggest the SEC is taking the need to “modernize” rather more seriously.
The SEC say that this latest move is motivated by a wish to “facilitate greater competition and innovation in the ETF marketplace, leading to more choice for investors.” As such the efforts to streamline the application process and establish more funds is great news for the long term adoption of crypto.
