Regulation
Are cryptocurrencies cleaning up?
This article argues that markets for crypto-assets like Bitcoin are maturing. This is partly due to tighter regulation and a greater willingness of crypto-asset creators to accept existing regulation. But there is also evidence that innovative moves by crypto-asset issuers to create new vehicles for crypto-asset investments have improved pricing efficiency and market liquidity, making crypto-asset investments safer for investors.
In January of this year the SEC spot trading approved on exchanges of funds invested in Bitcoin, making Bitcoin investments accessible to ordinary investors. These Exchange Traded Funds (ETFs) raise funds by issuing shares to purchase Bitcoin which are then stored in a secure digital vault. The ETF’s share price, therefore, reflects the dollar price of Bitcoin and effectively allows ordinary investors to trade Bitcoin without incurring custody risks. With this approval, the cryptocurrency industry is clearly on a path aimed directly at the financial mainstream.