Managing Director and Head of Europe at VanEck, Martijn Rozemuller, has stated that investors in Europe remain cautious of crypto investments despite ETFs approval.
Martijn disclosed that the launch of Spot Bitcoin ETFs in the United States is gaining significant acceptance, meanwhile, some European investors remain reluctant to pull in resources into the assets.
In his words,
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“U.S. investors are more willing to take educated risks. They’re also more used to trading on exchanges than some European investors that are still stuck in mutual funds that their bank or fund manager once advised”.
The VanEck Europe CEO highlights key differences in attitude toward the cryptocurrency sector on either side of the Atlantic Ocean. He disclosed that Europe’s crypto-curious investors typically include retail users, smaller independent wealth managers, and family offices:
“It’s mainly retail because a lot of the larger financial institutions are still reluctant to use any crypto-related products in their standard portfolios”, he said.
Rozemuller further adds that although Europe has a number of exchange-traded notes (ETNs) that are appropriately licensed, local regulators have “explicitly” mentioned that they’re not in favor of crypto-related investments.
Recall that the U.S. Securities and Exchange Commission (SEC), last month approved the first U.S.-listed exchange-traded funds (ETFs) to track bitcoin, in a watershed for the world’s largest cryptocurrency and the broader crypto industry.
This approval gave the green light to multiple financial firms to offer spot bitcoin ETFs, including asset management giants like BlackRock, Fidelity Investments, and Franklin Templeton that cater to retail investors.
After a decade, the ETFs have been poised to be a game-changer for Bitcoin, offering investors exposure to the world’s largest cryptocurrency without directly holding it. They also provide a major boost for the wider crypto industry.
Standard Chartered analysts said the ETFs could draw $50 billion to $100 billion this year alone. Other analysts have said inflows will be closer to $55 billion over five years. Some regulatory experts believe the Bitcoin ETFs could also pave the way for other innovative crypto products.
The green light marks a U-turn for the SEC, which had rejected bitcoin ETFs due to worries they could be easily manipulated.
Analysts say that the introduction of ETFs could usher in new investor cohorts from traditional finance, significantly improving market transparency and liquidity and bringing long-term capital inflow into the digital assets market.
Bitcoin ETFs promise major potential gains but also have notable downsides, presenting investors with a wide range of outcomes that will test their risk tolerance. However, investors are advised to weather the asset’s considerable volatility as well as uncertainty stemming from its association with issues of fraud and mismanagement in the wider crypto industry.