The Need for Cryptocurrency ETFs
The orthodox banking/financial systems provide a diverse range of investment structures and services. Before the advent of blockchain technology, these OTC services have been provided primarily by large financial institutions. One of the most widely offered of these services are exchange-traded funds (ETFs).
An exchange-traded fund is a form of investment fund that is traded on exchanges. ETFs offer investors a way to invest in a range of assets in one security that tracks the price of the underlying assets and can be bought or sold like a stock. ETFs make up a proportion of equity of U.S. corporations, and attract both retail and institutional investors.
Exchange-traded funds have advantages compared to directly investing in individual securities. These include low cost, tradability, diversification, liquidity, and tax efficiency. However, these come with fees and expenses. Primary structures of ETFs are index ETFs, actively managed ETFs, inverse ETFs, leveraged ETFs and thematic ETFs.
It goes without saying that investors are generally more likely to trust larger firms with longer track records to handle their capital. This makes competition limited as access to the industry is difficult for smaller, less established firms.