The acronym ETF stands for Exchange Traded Funds. An ETF mimics the price of an asset or a group of assets. Therefore, an ETF following bitcoin price is called a bitcoin ETF. Without owning bitcoin, you can trade using ETFs. A bitcoin ETF makes bitcoin eligible to be traded on a stock exchange similar to regular stock, commodity, or asset. Its extension with wrapping and Stacks in the form of decentralized apps and smart contracts is expected to accelerate bitcoin’s acceptance in the mainstream finance transaction.
However, the unregulated nature of the cryptocurrency market is a big deterrence to the issuance of bitcoin ETFs by the Securities and Exchange Commission (SEC). Till date, no crypto ETFs have been approved by the regulator, but investors and stakeholders of cryptocurrency trading are optimistic about their stand.
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Bitcoin ETF Approval Seeking: Timeline
#1. Attempt by Cameron and Tyler Winklevoss
The setback on the launch of bitcoin ETF to Cameron and Tyler Winklevoss in 2017 is not the only example of the regulator’s restraint on the ETF.
If you are new to the firms, let’s remind you, the firms grabbed headlines for their involvement in Facebook (FB) and, more recently, for their Gemini digital currency exchange. The SEC cited the reason as: bitcoin is largely traded on unregulated exchanges.
However, the Winklevoss brothers didn’t lose hope. They succeeded in getting their Winklevoss IP LLP for exchange-traded products patented by the U.S. Patent and Trademark Office. Winklevoss IP LLP is the name of their firm.
#2. Attempt by Cboe Global Markets (CBOE)
The CBOE is the exchange responsible for bringing about bitcoin futures. It also acquired Bats Global Markets, the exchange on which the Winklevoss ETF would have been offered. The organization approached the SEC for the approval of bitcoin ETFs, but its request was dropped on the similar ground as that of Cameron and Tyler Winklevoss.
#3. Attempt by VanEck and SolidX
VanEck and SolidX is a fintech company handling bitcoin-related projects. With a focus on institutional investors, it planned to roll out the bitcoin ETF, called VanEck SolidX Bitcoin Trust ETF. It was estimated to open with $200,000 per share.
Bitcoin ETF Finds a Different Route
The repeated denial of the regulator to approve bitcoin ETF favored the innovation called Wrapping, where a blockchain asset is replaced with an equivalent representation on another blockchain. However, it allows for a two-way transfer between the two assets.
Wrapping, initially, was brought to facilitate interoperability between the blockchain of Ethereum and the blockchains. However, with the induction of Bitcoin (xBTC) from Wrapped, the company behind Wrapping, to Stacks, particularly, Stacks 2.0, the waiting is over for bitcoin institutional users as well.
Bitcoin ETF: Way Forward
Stacks has software development resources for creating decentralized apps and smart contracts inheriting the power of bitcoin. With the consumer’s demand for greater privacy, decentralized apps (Dapps) could be the next big thing in the economy as they don’t store user data on centralized servers. Instead, data is owned by the user and can be taken from app to app. Experts see this as a remarkable development in DeFi space. Through Dapps, protocols, and solutions, the adoption of bitcoin as a payment option is likely to see new heights. All this makes bitcoin ETF, a propagator to the cryptocurrency.
