What is regulated exposure to Bitcoin?

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Bitcoin surpassed the $40,000-mark re-ignited interest rates last seen in 2017, especially when more and more institutions and investors are now pouring in with keen interest. Today, both retail and institutional demands are growing and crypto-exchange-traded products or ETPs are flourishing in the process as a result. Indeed, recent studies have also shown that, in the first 11 days of January, the German exchange-traded product accumulated an average daily trading volume of EUR 57 million.

Numbers by the Industry

CryptoCompare recently published a digital asset management analysis study with concern and exposure to crypto spiraling up.

According to the survey, over the past month, funds under control or AUM across all ETPs have risen by 95%. The reported AUM, in fact, was found to be about $35.96 billion. Unsurprisingly, a majority of the accumulated AUM was liable for Grayscale’s Bitcoin Confidence Offering, with a share of over $22 billion of the same keeping.

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In addition, in January 2021, aggregated ETP volumes have tripled, with more than $830 million reported per day. The GBTC volumes of Grayscale comprised 64 percent of the overall volumes.

With further interest pouring into the controlled crypto-exposure market, the question remains: does this help the crypto-landscape or further damage it?

Weighing Options: Self-Bitcoin Custody or Third-Party Introduction?

To be frank, because both sides of the dispute have some very good arguments, the above claim could persist for a long time.

Crypto-regulations will definitely introduce more mass acceptance and improve the digital asset industry’s customers and companies. Some nations, with Switzerland being one of them, are already developing a crypto-positive mentality. Indeed, the Swiss Financial Markets Supervisory Authority has already issued licenses to two entities supplying crypto-clients with banking services.

In the other hand, a cloak of confusion about crypto-regulations tends to be applied by countries like India and the United States. Few companies have made some substantial progress, with Grayscale Bitcoin Trust becoming an SEC reporting corporation at the beginning of 2020. Overall, however, governments need to worry about the possible undermining of the fiat currency, an asset they are striving dearly to secure.

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Here, the potential destruction of the identity of a digital asset remains a significant downside. The key allure of Bitcoin remains that it is fully open and its assets are totally private. Controlled cryptography will eliminate any of the decentralization since centralized authorities are responsible for protecting the crypto-allocation of the consumer. The closest example is Grayscale, since investing in Bitcoin by GBTC is unlike any conventional form of self-custody.

Where are we heading?

The growth of managed financial instruments is assured, as we are already moving for further institutional investments in 2021. The ultimate landscape, though, is still fuzzy as the jury is still out on whether an evolving decentralized crypto-ecosystem will co-exist with the existing financial landscape. Finally, the third choice is that Crypto is consumed by the standard collection of techniques.

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