Future Bitcoin ETF: Prohibited For 513 Millions Of Citizens?

in bitcoin •  2 months ago

065 bitcoin-Pixabay.jpg

The US authority SEC delayed and rejected the issuance of Bitcoin ETF’s this weeks, and we don’t know when this will change. But there is another problem that can limit the usefulness of this investing vehicles in the future.

Exclusive rules

The US capital market may be the largest in the world, but others are important, too. The European Union (EU), for example. The US has an estimated population of 328 million people this year, 2018, the EU, 513 million.

The problem is, the EU has new capital market rules since January, called “Mifid II”. With the effect that most US ETF’s (exchange traded funds) are no longer available to European retail investors or traders. The new law is supposed to protect the retail investors but is making impossible to buy simple and cost-effective ETF’s like the famous “Spider” SPDR S&P 500 ETF Trust (SPY), or the VanEck Vectors Gold Miners (GDX).

(Without much details, the keywords are Packaged Retail and Insurance-based Investment Products regulation /PRIIP/ and Key Investors Information Document /KIID/ which the ETF’s would need but aren’t having.)

Copies and other tricks

That means if the SEC would allow the start of Bitcoin ETF’s, finally, in the US, millions and millions of Europeans couldn’t buy them either. On this really huge market.

There are many ways to buy the investment products American ETF’s are following, for example, CFD’s (Contract for Difference), individual stocks, open-end funds or European ETF’s. It seems to me that some American ETF’s are packed in in European Twins, or have copies.

For example, for QQQ (Invesco QQQ Trust, the Nasdaq 100 shares ETF) I found a similar one in Frankfurt with the ticker EQQQ. For SPY, another called USPY. I suppose mayor ETF’s are making such solutions, but we don’t know if and when the same will happen with a future Bitcoin ETF. Maybe European regulators won’t allow it either.

Keep fighting

We have two ETN-s traded in Sweden, tracking Bitcoin and Ether, but these ones are prohibited now in the US. (I wrote about it here) Seems to be a tough fight to make cryptocurrency investments suitable for all, on all continents. I hope the famous “trade war” won’t make it even more difficult to buy US investment products for Europeans and vice versa.

Disclaimer:

I am not a financial advisor and this content in this article is not a financial or investment advice. It is for informative purposes only, or simply to make you think, entertain, increase testosterone and adrenaline level. Consult your advisers before making any decision.

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(Photo: Pixabay.com)

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Very useful indeed but i also find something useful for BTC investors and traders
https://twitter.com/kucoincom/status/1039851226559442944

Thank you for sharing with us. I believe people need to be careful and know what they are getting into, and into what they are investing their hard earned money.

SEC can keep trying to delay ETF for BtC. at some point they cant deny it anymore.

I don’t think an ETF will happen anytime soon. It is too risky with the amount of manipulation that is ongoing. Regulation will comes first

I understand why they made Mifid2. It’s to protect people who have no clue about investing. But for me it is a problem. My traditional investments are made up of funds and ETFs. But at the moment I can’t buy them anymore. The information about these funds and trackers needs to be available in the language of the country where it is being sold. Right now it’s only in English. So I hope companies like Blackrock and Vangaurd will do what the EU asks them to do!

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In Europe you find also a wide variety of ETF-s, but they are sometimes more expensive. Big ETF=small margin (between offer and bid), small fees.
I'm also buying certificates, warrants in Frankfurt/Xetra, with low leverage. Vontobel has bitcoin certificate.

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What you said is really possible that we can not afford to buy them

Even if you do not know, we might not even know, thank you for it.

Exclusive rules are really good

Problems mean that there may be some problem on every site, so do not let it stop

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