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Jeremy Allaire, the co-founder and CEO of financial technology company Circle, anticipates that the recent wave of Bitcoin exchange-traded fund (ETF) applications will eventually result in regulatory approvals, as the concerns previously raised by financial watchdogs are being addressed—paving the way for them to be greenlit.
“I think progress is being made with more mature market structures that would support something like that," Allaire said in an interview with Bloomberg. "You have mature spot markets, well-regulated custody infrastructure, and good market surveillance.”
According to the Circle boss, “many of the past concerns are being addressed,” something that makes him believe that Bitcoin ETFs “are more likely to be approved for general investor access.”
An ETF is an investment fund that trades on a stock exchange, allowing investors to gain exposure to a specific asset or group of assets. In the case of a Bitcoin ETF, it would enable investors to trade shares representing ownership ofwithout directly holding the cryptocurrency itself.
However, the U.S. Securities and Exchange Commission (SEC) has yet to be convinced that a Bitcoin ETF is a reasonable investment vehicle, citing possible fraudulent or manipulative practices and its desire to protect investors.
Allaire, however, is convinced that “digital stores of value like Bitcoin remain a hedge instrument in the context of continued persistent inflation and weakening currencies.”
In recent weeks, the SEC has faced a new wave of applications for Bitcoin ETF, starting with one tabled by Wall Street behemoth BlackRock on June 15 and followed by fresh filings from WisdomTree, Invesco and Galaxy Digital, and Valkyrie Investments.
Institutional interest in crypto-based investment products was also highlighted in the latest report released by digital asset management firm CoinShares.
Per the report, the total assets under management in crypto investment products last week reached a yearly high, surpassing a whopping $37 billion.
ProShares' own Bitcoin Strategy ETF (BITO), which tracks Bitcoin's price by strategically investing in CME Bitcoin Futures, also saw the largest inflows in the U.S. at $60.4 million, surpassing $1 billion in total assets under management.