Vitalik Buterin – the man behind Ethereum, the world’s second largest digital currency by market cap and the number one competitor to BTC – has announced that he doesn’t think right now is the best time for a crypto-based ETF (exchange-traded fund).
Vitalik Buterin: It’s Not the Time for a Crypto ETF
To be fair, such a product already exists. It was introduced by Pro Shares during autumn of last year, and it stirred heavy controversy by being based on futures technology rather than actual spot trading (aka physical bitcoins). There were several traders and analysts out there that claimed the product was inferior given that future technology was not as strong as legitimate spot trading.
They also took issue with the fact that while the product was approved by the Securities and Exchange Commission (SEC), it would be regulated under a 1940s financial law that was allegedly ineffective and didn’t account for all the changes occurring with new technology like blockchain.
Nevertheless, the product has been around for some time, and the SEC appeared secure in its idea that this would somehow satisfy or tame hardcore traders, but it failed to do so. Many investors wanted more, and they continue to push for a spot-traded bitcoin ETF, though the SEC has been slow to grant approval for such an item.
Buterin has commented this is not the end of the world, and that not having such a product in place could bear unseen benefits. In a recent interview, he commented:
I don’t think we should be enthusiastically pursuing large institutional capital at full speed. I’m kind of happy a lot of the [exchange-traded funds] are getting delayed. The ecosystem needs time to mature before we get even more attention.
Buterin also went further and offered his thoughts on the possibility of regulation in the crypto space, which remains a back-and-forth topic. There are many players out there that feel crypto regulation goes against everything the space initially stood for. Digital assets were created to give users full financial freedom and autonomy. They would be free from prying eyes and third parties, and the decisions about what they could do with their money would not be left to banks and standard monetary institutions.
At the same time, there has been heavy financial crime marring the crypto arena, and with so much fraud and illicit activity occurring, there is a growing voice of support for crypto regulation. Laws should at least be implemented to prevent investors from getting hurt, these advocates often state.
Regulation Is a Mixed Bag
Buterin threw his two cents into the mix by mentioning:
Regulation that leaves the crypto space free to act internally but makes it harder for crypto projects to reach the mainstream is much less bad than regulation that intrudes on how crypto works internally.
