Executives Claim Direct Exposure to Crypto Might be Better than ETFs

According to a panel hosted by Morningstar, Executives said direct exposure to crypto might outdo exchange-traded funds (ETFs).

An ETF could provide more security to investors. However, the executives said that it would not help them with immediate financial needs.

Executives alleged that financial advisers better exchange-traded funds in the industry. Last week, they said at a panel that Bitcoin ETFs might be more valuable to only financial advisers and their clients.

Cryptocurrencies Compared to ETFs

Tyrone Ross, chief executive of Onramp Invest, has more confidence in cryptocurrencies than in bitcoin ETFs. He believes that a colossal group of Americans might do better with direct exposure to cryptocurrencies despite the appeal of a bitcoin ETF.

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Ross explained that, for instance, stablecoins can facilitate a faster transfer of money than most financial institutions. What’s more, that feature was valuable to Americans who were in dire situations and needed cash immediately.

He added that his view comes from growing up in an unbanked home. Ross believes that crypto is a godsend to those that are underserving.

ETFs Compared to Cryptocurrencies

Matt Hougan, chief investment officer at Bitwise Asset Management, is confident that ETFs could help investors own cryptocurrencies ultimately. He said that the lack of such platforms has led to many retail investors not owning cryptocurrencies yet.

ETFs could significantly help investors do away with hacking or misplacement of passwords. Hougan said that investors could hold Bitcoin safely using an ETF. That’s because they are less likely to misplace their passwords or receive hackers attacks.

Hougan strongly believes that ETFs will be a game-changer in the industry, significantly opening up the market. He said that ETFs are worthwhile because they plug in seamlessly into the way financial advisers work.

Regulators Reluctance on Exchange-Traded Funds

The crypto community needs the Securities and Exchange Commission to approve a bitcoin exchange-traded fund already. Hougan blames the regulator for taking years to accept non-transparent ETFs and even physically-backed gold ETFs. He added that no one has ever accused the SEC of being a Lamborghini.

SEC chair Gary Gensler believes that the regulator would somewhat approve funds that invest in bitcoin futures than the underlying coin. That’s despite more than ten fund providers waiting for their proposed bitcoin ETFs approval.

Gensler said that the SEC was more concerned about market manipulation. He added that it held cryptocurrency to higher standards because many people joined the space when it was still perilous.

Hougan believes that investors are likely to invest in cryptocurrency even without the help of their advisers. He added that financial advisers needed to first understand the technology behind cryptocurrencies before having serious conversations with clients.

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He added that you could later evaluate those technologies or buy a diversified basket in an index.