Unlike its southern neighbor, which continues to stall, Canada appears to be rapidly tracking cryptocurrencies – as demonstrated again last week in the permit for three new ETH-based ETFs, the first in North America.
“Easy access to ETFs in Canada is changing the competitive landscape,” Campbell Harvey, professor of international business at Duke University’s Fuqua School of Business, told Cointelegraph. Harvey said the US Securities and Exchange Commission will feel pressure to approve a crypto ETF soon, possibly within a few months.
“It’s getting harder and harder to prove the exclusion of cryptocurrencies is right,” he explained, adding, “Think of an institutional investor who wants a well-diversified portfolio. Of course, this portfolio will include names like Apple with a market value of $ 2 trillion. What about cryptography? ”
On April 17, Purpose Investments, Evolve ETFs, and CI Global Asset Management were approved by Canadian regulators to launch the Ether ETF. This incident still raises some questions, although most people view it positively.
If so, how is the Ether ETF really different from the Bitcoin (BTC) ETF? Will it have the same target market or the same success in managed assets like the Purpose Bitcoin ETF, which has raised C $ 1.23 billion ($ 983 million) since debuting in February? In this sense, how important are cryptocurrency ETFs as a class – are they just a home in the midst of cryptocurrency’s ubiquity, and could they eventually be replaced by decentralized funding mechanisms?
Chris Kuiper, vice president of CFRA, an analytics and research firm, told Cointelegraph that individual and institutional investors prefer to make cryptocurrencies “market value weighted” rather than trying to pick winners and losers. Thus, the ETF for Ether, the second largest cryptocurrency, is an added bonus and “will allow them to start building this wallet.”
Kuiper added that BTC and ETH can also deviate in different directions, and in the end, Ether can attract its unique audience. After all, “many [investors] are beginning to view bitcoin as a base money level or gold 2.0 and even as an alternative to the company’s own holdings,” Kuiper said, explaining this to those who see bitcoin as the “main store” value. They “want the code to remain unchanged and transactions to be slow.” he added:
“However, Ethereum representatives are exploring the possibilities of Ethereum for programmable contracts – which means smart tokens – and for all kinds of applications that can be built on top of Ethereum. […] This is a completely different point of view, and these investors may not be interested in bitcoins, but they may be very interested in spreading Ethereum as some kind of new platform. ”
Purpose Investments CEO As Seif is also looking for opportunities to leverage the Ether ETF, for example, as a way to invest in a technology platform. He recently commented, “We are working to democratize ether access, making the process of owning ether easier than ever. We believe that ether […] is ready to continue its growth path and as an important tool, technology and wider adoption as an investment resource. ”
Jeff Dorman, chief investment officer at investment management firm Arca, told Cointelegraph that most investors today still don’t understand – or even know – about Ethereum and how it differs from Bitcoin. However, in his opinion, the market audience for BTC and ETH ETFs is essentially the same – that is, “those who are more limited in their ability to buy digital assets directly.” This includes financial advisors and equity funds.
Will Ether ETF perform as well as its cousin BTC?
As mentioned, the Purpose Bitcoin ETF is a success for most accounts. Will the Ether ETF attract the same interest?
Kuiper expects the Purpose Investments Ether ETF “to do well in acquiring assets as well, but I don’t expect them to receive the same amount of assets as their Bitcoin ETF.” Bitcoin is still the most important cryptocurrency, and although its dominance has declined recently, it still accounts for about 50% of the total market value. Ether, in second place, lags far behind, taking only 12% to 13% of the market share. Kuiper said the odds can be expected to remain roughly the same as their ETFs, adding:
“If you look at something like the Grayscale Trust in the United States, the AUM of bitcoins is over $ 40 billion, while ETH is just under $ 8 billion – or about a fifth. So I expect the Purpose Ethereum ETF AUM to be between a quarter to one-fifth of the ETF.