Can Crypto ETFs make their UK debut in 2022?

HIGHLIGHTS

• Bitcoin Futures ETFs made a grandstand debut with the launch of the ProShares BTC ETF on 19 October.
• While ETF investment has received green signals from regulators from Canada, the US or for that manner Germany, UK’s Financial Conduct Authority, is yet to authorize it.
• The FCA is of the view that as crypto market is extremely volatile and lacks a solid base.

As the US Securities and Exchange Commission gave clearance to the Bitcoin Futures ETF, the market is abuzz that other ETFs will be launched by the end of this year or next year. The Bitcoin ETF was dubbed as the watershed moment for cryptocurrencies as it shows the market acceptance towards cryptocurrencies. Crypto ETFs could well be the new avenue to invest in cryptos going forward and would expand the portfolio for investors.

Bitcoin Futures ETFs made a grandstand debut with the launch of the ProShares BTC ETF on 19 October. This event catapulted Bitcoin’s prices as it achieved its an all-time high of US$67,139 on 21 October. But, as the investors in US rejoiced, has the luck been same on the UK investors perspective?

Which all ETFs can a UK investor invest in? Can they invest in a BTC ETF or similar ETFs to Bitcoin?

ETF debut in UK

For UK investors, the wait might be a bit longer due to various reasons. While ETF investment has received green signals from regulators in Canada, US, Germany, UK’s Financial Conduct Authority (FCA) is yet to give its authorization. Access to this type of fund for UK retail investors is stonewalled as the regulatory body feels a fund that is linked to cryptocurrencies can be risky, until it is satisfied with integrity of the underlying market.

Also read: Why Bifrost (BFC) crypto can be a long-term investment option

The FCA feels that crypto market is extremely volatile and lacks a solid base. Therefore, crypto investment are riskier avenues to invest in.

Can Crypto ETFs make their UK debut in 2022?

But with growing voices in the market to recognize these investment instruments, investors want regulators to give a go-ahead for smooth and legalized investment process.

So, let’s look at the ETFs, if it gets a green signal could hit the market in 2022.

Bitcoin ETFs

The most obvious and popular ETF to invest in as far as investment are concerned for UK investors. ProShares ETF was a great hit within the investors with it reaping good rewards on the opening day itself. This also attracted institutional investors and with UK being the hub of crypto activities would be hoping that it makes its presence felt soon in the Bitcoin ETF space.

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Ethereum ETFs

This is the most anticipated ETFs at present. Seeing the mixed success of Bitcoin, we could very predict its debut well before the end of 2021. Ethereum has seen a bull run of late and it had reached its all-time-high of US$4643 on 4 November, taking the week’s gain to more than 10%. On Thursday, it was trading US$4,563.73 with a 24-hour trading volume of US$20,56,53,31,146. It was down by US$0.54% at the time of writing.

Also read: Crypto Reform Will Focus on “Debanking”

The bull run coupled with the performance of the Bitcoin ETFs have raised hopes that Ethereum ETF could well be the next big thing within the crypto domain to hit the market. There are rumours that Grayscale and ProShares have already started to line up teams to explore the option of launching one such ETF in the category. As Grayscale already has its presence in the UK, one won’t be surprised if it could be one of the first to hit the UK shores.  

Solana ETFs

Solana has been one of the strongest tokens that have hit the market of late. Its consistent performance on the market has raised hope of a possible ETF. A Solana ETF will give the market participants a wider variety of options and will give them new avenues to invest in. Although nothing official has come out on this but seeing the current performance and its growth in the market, it could well turn out to be a jack in the pack of future ETFs. Solana now has made its way up and now is placed at No. 4 on the list as per CoinMarketCap.

Also read: What makes AirSwap (AST) an ideal crypto investment?

Solana has already surpassed XRP and remains one of the top performers in the market. Currently, it is trading at US $238.96 with a 24-hour trading volume of US $5,546,873,598 on 4 November. There were rumours that VanEck will launch a Solana ETF in Germany in September, but nothing concrete has come out yet.

Cardano ETF

While Cardano does boast of an Exchange Traded Product, it is yet to officially launch an ETF of its own. Just like Solana, Cardano has been a proven product, which has a huge presence in the market.

A week ago, Cardano had outclassed Bitcoin in the investment area as the inflows hit the roof for the fourth placed crypto. Although a majority of the cryptos did get a surge and the market saw a good trade last week, courtesy of the launch of BTC ETF. But while Bitcoin’s rally withered away, the rest have managed to hold ground.

Also read: Why investors are so keen on TRAC crypto

Cardano ETF could well be another big bet that could see its debut in 2022 and inspire others to make their debut. On 4 November, Cardano was doing well in the market and was trading at US $2.03 with a 24-hour trading volume of US $4,79,71,21,766. It was up by 3.86% in the last 24 hours with a live market cap of US $67,58,21,54,212.

While these are the popular coins which could see an ETF, there are other coins that has gained traction and would make an interesting ETF option should it see the light.

Shiba Inu ETF

A Shiba Inu rallied nearly 800% in the past month and has been gaining traction from the investors. A Shiba ETF can be an enticing one considering the rally that it has got and especially with the outstanding performance of its meme-based token in the market.

Although not officially backed by Elon Musk, it has often been dubbed as the Dogekiller.  A Shiba ETF will give the investors an exposure to crypto market, which is considered as a safe form of crypto investment.

Also read: Why is Loopring Token grabbing eyeballs?

On 4 November, SHIBA had retracted from its original high and was trading at US$0.000059 with a 24-hour trading volume of US $7,88,90,48,478. It was down by 10.88% in the last 24 hours with a live market cap of US $32,46,97,19,805.

Uniswap ETF

Uniswap is one of the strongest DeFi tokens to trade going around in the marker. Recognized as an automated market maker (AMM), the UNI has gone from strength to strength ever since its launch in 2018.  It now ranks among the top 15 crypto assets and has created a flutter in the crypto market due to its conventional trading of assets.

A UNI DeFi ETF will be another great option for enthusiasts as it offers a great investment potential in some of the strongest DeFi. On 4 November, UNI was trading at US $27.06 with a 24-hour trading volume of US $45,31,05,681. It was up by 1.76% in the last 24 hours with a live market cap of US $16,96,48,46,626.

Conclusion  

UK investors will hope that the FCA opens its doors or introduces regulations to ensure the launch of ETFs in the market. With many of the big exchanges already having its presence in the country, 2022 could indeed be the golden year for ETFs in UK.