A cryptocurrency ETF can serve multiple purposes and provide several benefits to its investors. The crypto market is still nascent and has prevented many prominent players from entering this space. However, a regulated and established financial institution that offers an alternative route will increase the flow of funds into cryptocurrencies.
What is a Cryptocurrency ETF?
A cryptocurrency ETF or exchange-traded fund is an investment tool that allows investors to buy into performing cryptos without actually buying any crypto assets for themselves. An example of this would be if BTC goes up by 10% in a day, an ETF will also bring in 10% profit for its investors.
But there are certain shortcomings of cryptocurrency ETFs since they still operate in the traditional finance system. For example, when you buy into an exchange-traded fund tracking BTC, you are not buying any actual Bitcoin.
This makes it easier for regulators to track and monitor transactions on exchanges, but it also eliminates many advantages of using cryptos like privacy and decentralization.
Best Crypto ETF characteristics
What characteristics should a good crypto ETF have?
The fund’s operations should be completely transparent, with no hidden fees or annual costs and full regulatory compliance at all times. This creates trust between the investor and the provider, vital for increasing ROI (return on investment).
Full Regulatory Compliance
An ideal crypto ETF must be fully compliant with existing security regulations like the financial privacy act, crowdfunding act etc.
A crypto ETF should provide high liquidity through internal and external market makers, preferably under its decentralized autonomous organization (DAO).
An ideal bitcoin exchange-traded fund takes care of its investors.
Since we do not use Bitcoin for payments in any stores or businesses, an ideal bitcoin exchange-traded fund would allow investors to gain exposure without actually having to worry about private keys or wallets for my digital assets. These requirements are fulfilled when using a Decentralized Exchange & Share Trading Platform powered by blockchain technology.
Reputable investment options
Your ETF must provide commission-free trading through an easy-to-use app on its mobile or web platform. You should buy and sell the best cryptocurrencies using fiat currencies with complete investor protection. It should be an affordable platform to manage multiple exchanges with one account.
An ideal bitcoin exchange-traded fund should give investors exposure without worrying about private keys, wallets etc. Some EFTs already have these features built into their ecosystem. You can purchase digital assets like Ripple (XRP), Monero (XMR) and many other top tier cryptos with no commissions or hidden fees, making it more effective than similar products in the market today.
Withdrawals should be straightforward, supporting all digital currencies. It should take less than 15 minutes to withdraw funds from any cryptocurrency wallet without verification requirements. All withdrawals should be free, and there should not be a minimum withdrawal amount, which makes it more suitable for users who want to achieve independence from intermediaries.
With the best crypto EFT provider, you wouldn’t need a bitcoin exchange account or any other third party platform before buying cryptocurrencies using fiat currency since it’s the only platform where one can trade cryptos directly with top tier exchanges like Bittrex, Bitfinex etc. Buy &; sell cryptocurrencies in just a few clicks and enjoy complete investor protection under existing law.
The best EFTs pay high dividends to their investors since they Decentralised Autonomous Organisations. They should be a cryptocurrency investment platform where you can feel treated like one of its token holders!
All the before mentioned features are possible through Blockchain technology, which eliminates intermediaries, third-party platforms and provides decentralization. Investors do not want to take additional risks when it comes to their cryptocurrency investments. Hence, choosing an ideal EFT is simplified if one considers these easy to follow the advice when scouring the market for the best EFT platform.