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Silver Discusses the Crypto Regulatory Landscape and New Bitcoin ETF in Advisor Perspectives Article

By January 30, 2024No Comments

Commentary from Silver’s CEO, Fizza Khan, recently appeared in an Advisor Perspectives article that focused on cryptocurrency allocation in today’s regulatory and investment landscape.

In the article, Fizza notes that the SEC’s approval of U.S.-listed spot ETFs to track Bitcoin is a significant regulatory shift toward the acceptance and legitimation of Bitcoin as an asset class.

Additionally, she adds that the “regulatory approval signals that both retail and high net-worth institutional investors are able to add digital assets to their portfolios within a regulated, approved product, which may provide some level of risk mitigation around a class of assets that is typically regarded with caution because they are not widely understood.”

However, she goes on to say that “this approval does not consider the regulatory risks still prevalent concerning digital assets as a whole.  The SEC has opined that Bitcoin, specifically, is not a security, which perhaps promoted a bit more comfort by the SEC to approve the Bitcoin ETF.  But this approval does not eliminate the outstanding question surrounding other digital assets:  do these assets meet the definition of “security” as provided by the Howey test?  Perhaps it is not as important to determine this given SEC approval of the Bitcoin ETF, but the next step by financial firms that had requested such approval is likely to create an ETF of other digital assets.”

Finally, Fizza concludes that the potential outcome of the SEC’s approval of a Bitcoin ETF is “more capital inflow and increased legitimacy for digital assets. But uncertainty remains whether a Bitcoin ETF will encourage public acceptance of digital assets as a means of exchange, rather than as a speculative investment. My firm, Silver, does continue to see a steady increase in the number of private fund managers who include digital assets as part of their portfolios, presumably a sign that investors are still keen on the crypto and digital asset space. It will be interesting to see how both institutional and retail investors will react to this latest regulatory development and if it will encourage more retail investment in what is otherwise an asset class geared towards sophisticated investors.”

To read the full article, please visit the Advisor Perspectives website here.