Considering that Bitcoin is a digital currency, it has been commended for its capacity to dodge traditional transaction networks, and therefore it functions as a peer-to-peer, independent payment solution. While the concept may be seen as revolutionary, detractors made sure to point out that lack of regulation triggers, uncertain security measures and volatile price swings. Thus far, the uncertainty has barred Bitcoin from turning into a mainstream investment class for speculative traders.
To break down barriers, the acclaimed Winklevoss brothers, filed SEC documents in an attempt to register the first Bitcoin related ETF, named the Winklevoss Bitcoin Trust. There are many questions concerning the feasibility and role of the Bitcoin Trust ETF, however. The fund, which is still in awaiting SEC approval, has stirred things up.
How far is too far as far as niche exposure is concerned? To the head of ETF and vice president of transaction services for Nasdaq OMX, David LaValle, the Bitcoin ETF is a major innovation in a rising ETF market. LaValle doesn't just supervise Nasdaq's exchange-traded product platform, but additionally faces daily trading firms, issuers, and liquidity providers. He argues that Bitcoin ETF is a win-win solution for traders, investors, the exchange and the issuer.
- David LaValle, Vice President-Head of ETF Marketplace at NASDAQ OMX
An ETF is an exchange-traded fund that monitors an index or a specific asset. ETFs cover many aspects of the market and they can be purchased and sold during the day, on the stock exchange. The management fees involved are extremely low (0.004%). Lavalle commented in an interview with ETF.com:
"For the very first time an asset - Winklevoss Bitcoin Trust - comes to market in an ETF wrapper before it does in a mutual fund"
David LaValle argues that being on the precipice of a brand new investable asset is noteworthy, especially if that asset becomes available to investors first as an ETF. Simply put, the ETF gains credibility and it highlights the fund's benefits as an investment wrapper. When asked if a Bitcoin ETF has chances of appealing to a broader audience, LaValled replied:
"I think Bitcoin is evolving. It’s quite dynamic. We first saw consumers and merchants begin to be open to using it for transacting. But now, as we move toward bringing it in the form of an investment tool, I think it certainly broadens the exposure of potential users. But the Winklevoss Bitcoin Trust ETF could be used really as an investment tool or a trading tool."
The Nasdaq stock market is not only the largest in the US, but also the home of innovation across all types of businesses, ETFs included. David LaValle added that only time can tell if Bitcoin ETF is a genuine innovation or not.
"The ETP industry is continuing to evolve by bringing more efficient products to market that are targeting investment opportunities that already exist, and we’re also seeing innovation in the new types of products that are coming to market in terms of what you’re able to access through an ETF.”
About David Lavalle
David LaValle is a financial services executve with 14 years of professional experience delivering bottom-line results in management, strategic business development and client services. An authority on market structure and an expert in trading in exchange and broker dealer environments across equity, ETF, closed end fund and structured products asset classes. David is an accomplished public speaker with extensive C-level interaction, FINRA Series 7, 24 and 55 licenses.
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