July 11, 2018
Sirs,
I am a well diversified financial professional. The risk posed to the public by launching this ETF is actually less than in not doing so. As long as the SEC avoids binding fund approvals they are diverting the public towards possibly unsafe funds where a level of sophistication and risk acceptance on behalf of the average investor, is a high bar. The average investor is acceptant of using the internet to access financial accounts but the level to which someone has to go to buy cryptocurrencies is often well beyond what many would consider comfortable.
This filing is for accredited/institutional investors, as well it should be. An ETF offering for this level of investor would pave the way for, eventually, a retail level ETF. The United States is behind with public acceptance and utilization of cryptocurrencies and the SEC is uniquely positioned to provide a tailwind in an effort to change that. Europe has an ETF and other foreign countries have been much more accepting of this new technology than the US.
Right now a vast amount of volume comes from exchanges that are not based in the United States because liquidity, in many cases, lay elsewhere. There is no reason that Bitcoin as an investment need be different than another commodity that is traded internationally, like Gold or Silver for instance.
The only domestic exposure anyone has for a standard retail account right now is through ticker GBTC, which has an extreme premium over NAV, high fees, and sub-optimal liquidity. This makes it unsuitable for most IRA investors. Otherwise, an investor can take their chances with exchange purchase and some form of storage of the coin storage which, in many cases, has the same risk profile as cash in a shoe box.
A properly regulated ETF offering to accredited investors is a necessary first step to adoption and ultimately, a retail offering.