Trillion-dollar asset managers are increasingly focusing on cryptocurrency markets, prompting proactive steps. Following BlackRock’s engagement in June, additional potential issuers have submitted applications to the SEC. In the latest development, a European cryptocurrency Exchange-Traded Product (ETP) issuer has applied to the U.S. Securities and Exchange Commission (SEC). This signals a growing interest and participation from major financial entities in the cryptocurrency space.
New Spot Bitcoin ETF Application
Pando Asset Management, a bit late to the Bitcoin ETF scene, has applied for approval from the SEC. Currently, there are 13 applications waiting for the SEC’s green light. Big players like Fidelity and BlackRock are facing tough competition, implying that if many get approved, companies might need to spend a lot on marketing to attract customers. The upside is that as more Bitcoin ETFs gain interest, there could be a shortage of supply on exchanges.
Pando Asset AG’s application reveals that Coinbase Custody Trust Company will handle custody services, just like for others. The Bank of New York Mellon will be the trust administrator. Some unfounded rumors about BlackRock claimed it mentioned risks in its application, but this is standard for all spot Bitcoin ETF applications, including Pando’s.
For example, some risks include:
- Crypto prices, including Bitcoin, can be very unpredictable and might keep changing a lot.
- If Bitcoin prices keep going down, it could really hurt the value of the Shares, and they might lose a lot or all of their value.
- The value of the Shares depends on various things about cryptocurrency, and if private keys are lost or compromised, the asset can be permanently lost.
- The Shares’ value is linked to how widely accepted Bitcoin becomes because it’s a new and quickly evolving industry.
- If changes in how a digital asset network is managed don’t get enough support, it could harm the network’s growth and ability to deal with challenges.
The list of risks go on, and every ETF applicant has to include these details for each underlying asset, even if some risks are extremely unlikely.
- Big money managers are considering cryptocurrency assets, which could be worth trillions.
- The market for Spot Bitcoin ETFs is expected to grow, leading to increased competition.
- All ETF applications must include disclosures about risks; it’s a necessary part of the process.