Wall Street giants are reportedly seeking approval for the launch of bitcoin exchange-traded funds (ETFs) amid the turmoil in the cryptocurrency industry.
The global financial services firms BlackRock and VanEck are reportedly leading the charge to have the Securities and Exchange Commission (SEC) approve the launch of bitcoin ETFs in the US, according to news outlet Marketwatch.
While the SEC has yet to approve an ETF, the news follows an increase in interest from Wall Street in cryptocurrency-related investments. The news also follows investor worries about the potential impact of increased government scrutiny on the cryptocurrency market.
The news outlet noted that VanEck had gone so far as to file applications for the launch of a bitcoin-related ETF over the course of the year. BlackRock, on the other hand, has reportedly been studying the potential of a bitcoin ETF, albeit at a much slower pace, according to the report.
VanEck’s ETF, called the VanEck SolidX Bitcoin Trust and filed earlier this year, would reportedly involve a share of the trust being sold to accredited investors at 25 BTC apiece. The trust would then use the holdings of the bitcoins to provide the framework for the ETF.
The launch of such vehicles would represent a major shift in the cryptocurrency industry, with ETFs potentially providing more regulation than investing through an online marketplace. At the same time, ETFs could serve to make trading cryptocurrency easier and more efficient.
However, the approval of bitcoin ETFs faces stiff resistance from cautionary regulators who believe that such vehicles could present a range of risks, such as manipulating the cryptocurrency market. In addition, there are concerns about fraud given the decentralized nature of the market.
The SEC has repeatedly delayed the approval of the ETFs, with the SEC chairman, Jay Clayton, recently noting that the agency will only approve the launch of an ETF once the risks associated with such a move have been mitigated.