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The Big ETF: Why Americans Are Waiting for It

Introduction:

In recent years, the popularity of cryptocurrencies has skyrocketed, with Bitcoin and Ethereum leading the way. These digital assets have become a hot topic of discussion among investors and financial experts. However, while Europeans have been enjoying the benefits of cryptocurrency investments since 2015, Americans are still waiting for the arrival of the big ETF (Exchange-Traded Fund). In this article, we will explore why Americans are eagerly anticipating the launch of the ETF and discuss the advantages and disadvantages of investing in cryptocurrency through ETFs.

The European Advantage:

It’s puzzling why Americans are lagging behind when it comes to cryptocurrency investments. Europeans have had access to registered products that allow them to invest in Bitcoin and Ethereum since 2015. These products have made it incredibly easy and convenient for Europeans to add cryptocurrencies to their investment portfolios. Unlike in the early days of cryptocurrency, when investing in Bitcoin was complicated and risky, Europeans can now simply type in an ISIN and have Bitcoin in their portfolio, just like gold or a Facebook share. The process is hassle-free and eliminates the risk of losing private keys.

Introducing Valor:

To shed more light on the topic, we spoke with Yanna and Marco from Valor, a leading provider of cryptocurrency investment products. Valor offers a range of coins and investment opportunities, including Bitcoin and Ethereum. One of their unique selling points is that their products are free of charge for long-term holders. While investors may still incur brokerage fees and spreads, holding the product itself does not come with any additional costs. Valor also offers a selection of alternative coins, such as Solana, Polkadot, and Uniswap, allowing investors to diversify their portfolios.

The Difference Between ETPs and ETFs:

Before delving further into the American ETF dilemma, it’s important to understand the difference between ETPs (Exchange-Traded Products) and ETFs. ETPs are a family of products that include Exchange-Traded Funds (ETFs), Exchange-Traded Notes (ETNs), and Exchange-Traded Commodities (ETCs). While ETPs are technically exchange-traded products, ETFs are a specific type of ETP. ETFs are funds that trade on an exchange, while ETNs are debt instruments and ETCs are commodities. Valor’s products fall under the category of ETPs, specifically ETNs or ETCs, depending on how Bitcoin is classified.

The American ETF Delay:

Now, let’s address the elephant in the room: why are Americans still waiting for the big ETF? It’s perplexing that Europeans have been enjoying the benefits of cryptocurrency ETFs for years, while Americans are still debating whether they should be allowed and listed. The delay in launching ETFs in the US can be likened to Europeans using the latest iPhone while Americans are waiting for the release of the first-ever iPhone. The time difference is significant, with Europeans having a head start of eight years in the cryptocurrency investment space.

Advantages of ETPs:

There are several advantages to investing in cryptocurrency through ETPs. Firstly, it eliminates the hassle of moving money from the traditional financial system to the crypto system, which has been a challenge for many investors. Banks have been reluctant to support cryptocurrency transactions, making it difficult for individuals to invest directly. ETPs provide a bridge between the traditional financial system and the crypto world, making it easier for investors to access digital assets.

Additionally, ETPs offer favorable tax structures in many countries, including Sweden. In Sweden, for example, there are investment savings accounts and capital insurances that provide tax advantages compared to holding physical cryptocurrencies. This tax advantage, coupled with the simplicity and convenience of ETPs, makes them an attractive option for investors.

Disadvantages of ETPs:

While ETPs offer numerous benefits, there are also some disadvantages to consider. One major drawback is the reintroduction of a middleman. The whole concept behind cryptocurrencies was to eliminate the need for intermediaries like banks. However, by investing in ETPs, investors are once again relying on a bank or financial institution to hold their assets. This reintroduces counterparty risk, as investors no longer have full control over their private keys.

Another potential disadvantage is the absence of direct ownership. When investing in ETPs, investors do not directly own the underlying assets. Instead, they hold a certificate that represents ownership. This means that if the issuer of the certificate were to go bankrupt, investors may face challenges in recovering their assets. However, reputable ETP providers, like Valor, mitigate this risk by storing the underlying assets with trusted custodians.

Expansion Plans and Partnerships:

Valor is continuously expanding its offerings and partnerships to cater to the growing demand for cryptocurrency investments. They recently signed an exclusive agreement with Bitcoin Swiss, one of the largest cryptocurrency asset managers in Switzerland. This partnership allows Valor to provide ETPs for Bitcoin Swiss, offering a wider range of investment opportunities to clients. Additionally, Valor offers a white-label solution, allowing small asset managers, family offices, and banks to enter the digital asset space quickly and easily.

Conclusion:

While Americans eagerly await the arrival of the big ETF, Europeans have been enjoying the benefits of cryptocurrency investments for years. ETPs have made it simple and convenient for Europeans to add digital assets to their portfolios. The advantages of ETPs include easy access to cryptocurrencies, favorable tax structures, and simplified investment processes. However, there are also disadvantages, such as reintroducing counterparty risk and the absence of direct ownership. Despite these drawbacks, ETPs have proven to be a valuable tool for investors looking to diversify their portfolios with cryptocurrencies. As the demand for cryptocurrency investments continues to grow, companies like Valor are expanding their offerings and partnerships to meet the needs of investors worldwide.