There’s been a lot of noise in the world of cryptocurrency this year and plenty of signs of a dedicated ETF. Joining the “ETF Report” with hosts Alexis Christoforous and Kristin Myerson Yahoo Finance, ETF Trends’ CIO and Director of Research, Dave Nadig, speaks to what to expect as far as a fund is concerned.
As of now, Nadig believes the fall may be the best time to expect some official announcement of a crypto ETF. Six months from when the Toronto exchanged started trading on the BTCC seems like a reasonable time to expect guidance from the SEC.
For what it’s worth, there are currently 9 ETF filings in the U.S., with two of those from WisdomTree and VanEck being pretty far along in the process. However, it still comes down to what kind of notes the SEC will have regarding either letting these funds go through or taking more time to develop before seeing who is first to release a crypto fund.
Once these funds do start coming through, as far as stabilizing the floor in this sector, Nadig is sure these ETFs can help.
Nadig adds, “The more institutional/traditional money is playing in the crypto space, the less volatility we’ll see. You’ll simply have holders that are being more rational about what their goals are for their Bitcoin holdings.”
With $60 billion focused on some packaged vehicles worldwide, it will have a real effect on stabilizing the area for the asset when that comes through. It will make access easier for investors as well, who can do more than just rely on the advisors who have exposure in that sector.
When can we expect a cryptocurrency ETF in the U.S.? “We’re looking at sometime toward the fall,” ETF Trends’ @DaveNadig says. Six months “from when the Toronto exchange started trading BTCC… [is]a reasonable time for us to start really looking for some guidance from the SEC.” pic.twitter.com/E283skeCqa
— Yahoo Finance (@YahooFinance) April 21, 2021
Checking On Blockchain
Shifting focus to Blockchain ETFs, such as the Amplify Transformational Data Sharing ETF (BLOK) and the VanEck Vectors Digital Transformation ETF (DAPP), and the digital asset ETFs in focus, this is where a lot of interesting things are taking place in Blockchain technology currently.
According to Nadig, “These are the companies and the technologies that could really reinvent financial services around the world. Those are the kinds of companies you see in ETFs like this. So, you see an uptick in interest – not huge flows, but definite interest.”
As far as current plays in the bond market, Nadig explains how advisors aren’t into bonds and really don’t think there’s an alternative to being in the equities space, as they don’t feel as though they are getting paid to own bonds. As it stands, the way things are going suggests negative yields when considering inflation expectations.
Instead, there’s more rotation towards safer and defensive equities. Nadig expands on this by noting the push into dividends or rotating into utility stocks. There’s also money going into value stocks and other top asset gatherers for the year so far. So the rotation into this zone may not be as exciting, but it is stable.
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