Financial products built on solid fundamentals with great transparency

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What potential could investors realize if they had access to a financial product based on a strong store of value, backed by highly liquid global markets, and with daily transparency reports to ensure investor confidence? A bitcoin ETF offers a sweet spot that the SEC and historical investors should be prepared for.

Supporters in the industry have long viewed a bitcoin ETF (BTC ETF) as an important step in changing the perception of bitcoin from that of a murky financial tool favored by obscure super-coders to an adopted institutional class asset. by traditional investors. The SEC’s rejection of several spot bitcoin ETFs this fall, with Valyrie and VanEck being the most recent, highlights the challenges facing crypto products traded on exchanges in the United States. .

While market manipulation is a legitimate concern, and there is no debate on the need to protect investors, the SEC’s reasoning misses the mark. A financial product built on top of the Bitcoin blockchain is part of a larger transformational change that is already underway, where the most distributed and secure ledger ever created will inspire investors, managers, auditors and regulators to reinvent what is possible. Assurance tools to provide transparency of on-demand and real-time financial data and information will be commonplace and have already been proven by Armanino’s ability to account for over $ 28 billion in backed instruments. to real-time crypto assets. These tools meet and exceed the SEC’s mission to ensure financial transparency as a key element of consumer protection.

An important example: the XBT product from CoinShares. Launched in 2015, the Note on monitoring XBT suppliers, traded on NASDAQ in Europe, has parallels to a spot BTC ETF in that the asset manager must maintain a hedge of the underlying assets so that the notes are properly backed even in the event of a daily fluctuations in market prices. In 2020, CoinShares made the bold decision to become the only publicly traded asset manager to offer real-time visibility into liabilities and assets through Armanino’s Real-time TrustExplorer attestation ttechnology. To date, CoinShares’ total assets under management are approximately $ 6 billion and TrustExplorer has issued over 7,120 attestation reports in the past 15 months. During the same period, the largest ETF products produced only a handful of reports.

Currently, ETFs available for commodities like gold, rare metals, or income-producing assets like real estate are much more opaque to markets, regulators, and investors than a bitcoin spot ETF. would. With on-demand certification of the underlying assets and the note obligations, there is simply no match. A bitcoin futures ETF is a better start than nothing, but the Spot ETF, backed by Real-Time Attest, will usher in a new era of financial products built on a transparent and verifiable foundation to support client protection, market protection. and well-informed capital formation.

For any questions or to find out more, contact our Digital assets and blockchain team.

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© 2021 The Block Crypto, Inc. All rights reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial or other advice.

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