When cryptocurrencies were brought into existence, the sole purpose of their existence was global adoption. The cryptocurrencies had been launched to side-line the traditional financial sector and offer something completely new to the world.
It may be true that the cryptocurrency sector does offer an alternative to traditional financing, however, it hasn’t really achieved its primary goal. This means that despite attracting millions of users, the cryptocurrency industry hasn’t been able to attract many people from the mainstream sector.
Adoption Void from Mainstream Institutes and Investors
When it comes to the adoption of cryptocurrencies from the mainstream institutional end and businessmen, cryptocurrencies haven’t been able to achieve much. Yes, there are mainstream institutions such as MicroStrategy, Galaxy Digital, PayPal, Tesla, and many more mainstream companies that have invested in cryptocurrencies in their own way.
However, these are only a handful of mainstream institutions that have adopted cryptocurrencies and blockchain technology. There are millions and millions of mainstream institutions that still haven’t even considered investing in cryptocurrencies. A vast majority of these institutions have one major concern and that is something that they all wanted to be addressed before they start investing in cryptocurrencies.
Reason for Not Adopting Cryptocurrencies
Among all the reasons that the mainstream institutions have with cryptocurrencies, there are two that are on top of the list. The very first reason is the lack of regulatory framework and adherence within the crypto-sector. As the entire crypto-blockchain sector is interconnected one way or another, it may prove very risky for one to have their funds stored there.
Out of the entire cryptocurrency sector, more than 95% of the industry comprises unregulated crypto-blockchain platforms. This is the reason why things are too risky for mainstream institutions to adopt cryptocurrencies.
Then there is the volatility that is always there within the cryptocurrency sector. As cryptocurrencies do not have a physical existence, value, and worth, they may always remain extremely volatile.
The solution offered to Mainstream Institutions in the form of ETFs
Although it took the cryptocurrency technology sector almost a decade to come with a solution to the problem, it has done it. Starting from the year 2021, the cryptocurrency sector, as well as major investment firms from the mainstream sector, have come up with Exchange-Traded Funds (ETFs).
As of now, several countries are offering different kinds of cryptocurrency ETFs based on major cryptocurrencies. Out of all the ETFs, the most prominent ones are for BTC and ETH. However, there are several altcoin ETFs being offered throughout the globe. In the case of ETFs, a firm or institution holding cryptocurrencies goes for a public listing. Instead of directly offering cryptocurrencies, the particular form converts its valuation into stocks like publicly listed companies.
These ETFs are approved by the regulatory authorities of the respective countries and offer stability, security, and risk-free trades to investors that are regulated. As of now, several countries including Canada, Dubai, Brazil, and even European countries are offering crypto-ETFs.
This way, the investors are indirectly investing in cryptocurrencies such as proceeding to buy Ethereum with credit card or bank transfer, or doing the same for Bitcoin.
Major ETF Adoption Awaits US’s Decision
When it comes to crypto-adoption, there is no other country that is doing it the way the US has. As of now, over 41% of the total adults in the United States have invested in Bitcoin. This goes to show the adoption rate of cryptocurrencies in the country. This is the reason why several dozens of BTC ETF requests have been submitted to the US Securities and Exchange Commission (SEC) for approval.
Unfortunately, the US SEC has taken more time than expected for their approval and the process is lingering on. According to many analysts, as soon as the crypto-ETFs are launched in the United States, the crypto-sector will grow into a giant.
However, for now, the decision is with the US SEC that is currently occupied with clearing the mess that Donald Trump’s administration left.
As of now, two major BTC ETFs are trading through the New York Stock Exchange (NYSE). The names of these ETFs are Valkyrie Bitcoin Strategy ETF (BTF) and ProShares Bitcoin Strategy ETF (BITO). Apart from these two, there aren’t any ETFs that have been given the go by the US SEC for a public listing.