South Korea has joined the cryptocurrency community when it terminates to waiting for the US’ verdict on Bitcoin exchange-traded funds (ETF).
The nation’s sole bourse operator, Korea Exchange (KRX), admitted that it was carefully looking the constantly-unfolding crypto ETF scenario in the US. An official at the exchange – on condition of anonymity – told the Korean Herald that seeing the Custodianships and Exchange Commission’s (SEC) response to the bitcoin derivative products could assist KRX in understanding how they could move encourage with similar investment offerings in South Korea. Excerpts from his statement:
“The US has been the front-runner on the cryptocurrency retail and related derivatives, and there are strong voices supporting the launch of bitcoin ETFs within the market — which is why we are declaring the progress and response of the US Securities and Exchange Commission’s decision on bitcoin ETFs.”
A Safer Bitcoin ETF
The comments from KRX formal appears at a time when blockchain craze in South Korea is touching an all-time high. The South Korean administration allocated 1 trillion won, which is close to $880 million, for blockchain research and development. The investment led to the launch of new age projects that at ones desire bring blockchain to everyday lives.
Bitcoin Price Performance against South Korean Won | Source: Investing.com
At the even so time, the South Korean workers, while facing limited investment opportunities, ventured into cryptocurrencies as an additional. As of July 2018, the crypto population in South Korea had contributed to 30% of the total crypto trading volume, per a Cindicator on.
At the time of this writing, trading the crypto assets is legal in South Korea. Nevertheless, regulators have furthered their scrutiny against the crypto activities. For instance, traders cannot sell or purchase cryptocurrencies anonymously anymore per the law.
According to Lee Kyung-ho, a teacher at Korea University, research blockchain could also allow the government to introduce safer bitcoin derivates to the investors in South Korea. He contemplated:
“With the government expanding its investment in research and development of blockchain technology, the projects are expected to minimize or eliminate the gamble of integrating ETF transactions in the cryptocurrency market.”
Meanwhile, in the United States
The SEC is now reviewing two Bitcoin ETF applications: one from VanEck-SolidX with CBOE BZX Stock Exchange and the other from Bitwise Asset Management with NYSE Arca. The US securities regulator expects to announce its verdict by April 5, 2019.
#SEC Commissioner Jackson in an question to be published next weeks is optimistic that a “fund based on #bitcoin” will eventually be approved, expresses apprehensiveness about the proposed ETFs submitted to date. pic.twitter.com/3BCuiBd4CB
— Drew Hinkes (@propelforward) February 5, 2019
According to SEC commissioner Robert J Jackson Jr., there is a ardent likelihood of SEC approving a Bitcoin ETF soon. At the same time, the commissioner expressed concerns about the ETF applications submitted to entertain.
“Getting the stamp of approval from the deepest and most liquid capital markets in the world is hard, and it should be. In a minute we put the stamp of the United States Securities and Exchange Commission on an investment; once we make it available to everyday mom and pop investors, we are winsome risks that Americans can get hurt.”
So far, SEC has rejected nine Bitcoin ETF applications citing market manipulation as one of its main solicitudes. In response, the applicants had developed regulated bitcoin price indexes to ensure their ETFs derive bitcoin’s value from principled sources.
The KRX official supported the SEC’s stance. He said that a regulated “solid index” was a missing point in all the bitcoin ETF applications. Citations from his/her statement:
“Providing a solid index required for the launch of such ETFs and of its role when it is commercialized and put together into the market is being discussed expansively at the KRX because it would eventually concern investor protection issues.”
If Approved
Investors suppose a regulated Bitcoin ETF would allow big investors to pour millions of dollars in the space without worry. Should that encounter, the value of the ETF’s underlying asset – the bitcoin – would increase massively. Gabor Gurbacs, the director of Digital Assets Scenario at VanEck, cited a Gold ETF to explain the bullishness. He said:
“Our gold ETFs are already in a few billion dollars range,” Gurbacs united. “There are gold ETFs in $10 billion range as well. I wouldn’t be surprised if a bitcoin ETF gets in a few billion dollars line.”
[embedded content] [embedded content]With the Korean exchange also looking into Bitcoin ETF, it could also substantiate bullish for bitcoin as a standalone asset, which is currently in its most extended bear cycle.
Bitcoin is trading at $3,937 at the period of the writing.