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With the evolution of technology, numerous indications have proved that the business owners are ready to turn their digital currencies into a proper investment vehicle. A recently developed company with the name of EtherIndex LLC has filed this Friday with the exchange commission and securities that will help them to introduce an exchange-traded fund that is based on ether, it is a special cryptocurrency that will be utilised to power the network of Ethereum.
The responsibility of this act will come on the shoulders of SEC opening a project for the Bitcoin ETF. Tyler and Cameron Winklevoss that belong to the Gemini for the public commenting conducted this. Last Tuesday SolidX also filed to launch the Bitcoin ETF.
'ETFs are regularly used by a wide variety of investors in order for themselves to gain exposure to specific sectors or help build a portfolio.'
Similar to the Bitcoin it can be regarded as a young digital currency. It was introduced in the market a few months ago. During the last month, the market cap fraction of ether was quite similar to that of Bitcoin. The range has been exceeding to $1 billion, whereas the market cap of Bitcoin is stable at $10 billion. Having several vulnerabilities and volatilities still, this newly launched cryptocurrency has gained a high filing ratio and its repute is remarkably increasing. Many companies have been demanding the legit digital currency investment vehicle and this is the reason that the activity around the cryptocurrency like ether has been increased.
The investors had to limit themselves in the ways that might get the Bitcoin exposure in their portfolios. On the other hand, the investors have found no way to gain the ether exposure into their portfolios.
Despite the interest of the investors, they might have to face a few drawbacks, as ether is immature as a cryptocurrency. Statistics has proved that SEC will be uncomfortable in utilising it as an asset for their investment vehicle. In addition, the filing of S-1 has been put together quite quickly and this means that the investors will have to wait now. As Ether Index can into existence only a month ago, its filling is incomplete as well. It will not name:
'We are all for anything which adds to the deserved legitimacy of cryptocurrencies, especially ones we favour such as Ethereum or Bitcoin as they serve a real purpose.'
Ticker Trustee Administrator The co-founders have a lacking professional relationship that has been proved by the incomplete infrastructure. The LinkedIn profile of the chief executive of ether has indicated that he has no experience in the digital currencies. Ether is only at the beginning stages that has been proved by the issues it has been facing and the missing track record it has. It has been shown that ether is currently in an unstable state but they are attempting to emerge from this crisis as they have raised more than $150 million from the crowd-funding project that is named as Decentralized Autonomous Organization. Still, the institutions related to finance are building up technological infrastructures so that the digital currencies can be converted into a traditional form of investment.
ETFs are regularly used by a wide variety of investors in order for themselves to gain exposure to specific sectors or help build a portfolio. There are many advantages, especially compared to other types of managed funds like mutual funds or spread betting. They are similar to stocks in the sense that they trade, but can also be compared to broader investments.
We are all for anything which adds to the deserved legitimacy of cryptocurrencies, especially ones we favour such as Ethereum or Bitcoin as they serve a real purpose. And to be associated with an ETF not only adds legitimacy to Ether or Bitcoin, it also benefits people who want to speculate and trade cryptocurrencies.
There’s also disadvantages to being aware of before jumping into ETF investments. An obvious one is trading on margin is a double-edged sword, the leverage will quickly move against you if you try to trade unprofessionally.
We are strongly against the idea of short sighted day trading strategies and would never recommend you trade with any type of ETF without applying a proper, sound strategy.
The only investor which is successful in any market is one who invests as a portfolio manager, and applies the rules of diversification, risk management and not putting all their eggs in one basket.
There are also considerations towards the taxation of ETF’s and how to go about finding the right platform and trading account if this is all new to you as well.
If the past few paragraphs are not making any sense to you then avoid ETF’s until you learn how to get them to work for you, otherwise, you will likely end up out of pocket and that will not be the fault of Bitcoin, Ether or ETF’s it will be your own fault!
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