U.S. regulators are doing American investors a disservice by not authorizing cryptocurrency ETFs. There are over one dozen ETFs currently on hold in the review stage at the U.S. Securities and Exchange Commission. Meanwhile, Canadian regulators began allowing investors to buy crypto ETFs in February.
“The Canadian regulators are one step ahead — there’s no doubt about it. It’s surprising to me that the SEC has also been so slow. I assume with [SEC chief Gary] Gensler now taking the seat officially, that’s going to speed up,” Mike Novogratz, Galaxy Partners CEO tells Yahoo Finance Live.
Novogratz and Galaxy worked with asset management firm CI Financial to launch the CI Galaxy Ethereum ETF (ETHX-U.TO) on the Toronto Stock Exchange Tuesday. It’s one of three ethereum ETFs that Canadian securities regulators have approved for listing this week, and they are the first of their kind in North America. In February, the Purpose Bitcoin ETF (BTCC-U.TO) was similarly the first bitcoin ETF to list in North America.
But U.S. investors who want crypto exposure have it tough if they don’t want the custodial headaches that can come with buying actual coins and tokens. Grayscale Investments manages cryptocurrency trusts, such as the Grayscale Bitcoin Trust (GBTC), which are exchange traded products and somewhat similar to ETFs. But because of their structure, they’re subject to so-called tracking errors, where the trust trades higher or lower than the underlying asset it’s supposed to be tracking. True ETFs tend to have fewer and less volatile tracking errors because market makers can dynamically create and destroy baskets of new shares.