Huobi, a Singapore-based trading platform currently ranking among the world’s top three cryptocurrency exchanges, has made headlines on June 1[1] as it unveiled an exchange-traded fund (ETF) that tracks an index of top ten crypto assets against Tether, a digital currency tied to the US dollar.
While an impressive feat that will undoubtedly draw even more retail investors into cryptocurrency trading worldwide, on the global scale this is hardly the first instance of a regulated crypto-based derivative being offered to the public. Sweden, which usually serves as a textbook example for getting crypto-based investment funds right, had introduced bitcoin traded products as early as in 2015[2].
As pockets of crypto securities emerge in Europe and Asia, one major jurisdiction is conspicuously absent from this map – the United States. Despite numerous efforts on behalf of investment firms to get a regulatory clearance for listing and trading cryptocurrency ETFs on major US exchanges, the Securities and Exchange Commission (SEC) has been reluctant to open the floodgates so far. A closer look at the back-and-forth between the regulatory agency and wannabe pioneers of regulated crypto investment suggests that the SEC’s approval is just a matter of time.
What exactly is ETF?
Exchange-traded funds, or ETFs, are securities that combine diversification of mutual funds with trading capacities of stocks. An ETF tracks an index or a basket of assets that are proportionately represented in the fund’s shares. Along with index mutual funds, ETFs are one of the major mainstream tools for passive investment. Longing for the allure of regulated securities, many in fintech community consider the emergence of traded crypto funds a milestone on the way to mass adoption. Serving as a liaison between the world of crypto exchanges, which remains obscure to many cautious
