How Exchange-Traded Funds Impact Cryptocurrencies

An ETF (or Exchange-traded Fund) is a marketable security which tracks a basket of assets, an index, etc. Via an ETF, you have access to shares by buying from a stock exchange that houses the assets. It is much better, cost effective, and easier than buying shares from individual companies. All you have to do is to buy from a stock exchange that contains many other similar assets; and your shares will be evenly distributed throughout all the assets on the exchange.

The concept of Exchange-traded funds has now found good use in the cryptocurrency market. The way ETFs are defined on the normal stock exchange market is the same way it is defined on the blockchain market. Hence, a blockchain ETF involves investing in a basket of blockchain-based industries. This is done by investing in a particular exchange that contains several similar blockchain industry assets too.

One of such exchanges amidst many others is Coinbase. Coinbase currently supports just 5 digital assets which are the biggest well-known and widely accepted cryptocurrencies, and are also accepted by the regulating body – SEC (Security and Exchange Commission).

                                                       

The cryptocurrencies found on Coinbase are: Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Ethereum Classic (ETC) and Litecoin (LTC).

Recently, an exchange, CBOE (Chicago Board of Exchange) submitted a proposal to the SEC requesting that they accept their Bitcoin ETF in the crypto market. Interestingly, ever since the SEC declared their intentions to make known their verdict by August 10^th 2018; all eyes have been eagerly looking, all minds have been pondering on what the SEC would decide. “Will it be for or against the interest of the crypto market?” is the question on many lips.

Moreover, a number of people are uncertain about the consequence it will have on the crypto market. For some, it is a victory trail for the crypto market because it will skyrocket profits, and encourage investment on other coins too. While for some others, it may not be so good since the crypto market has no prior experience in this matter.

Now, you can cut the chase and go right to the report Underneath.