Trillion-dollar asset managers are showing great interest in the cryptocurrency markets and have started to take action in this area. Following BlackRock’s move in June, other potential issuers have made their applications to the SEC. Today, a European crypto ETP issuer has also applied to the SEC.
Pando Asset Management, although a latecomer to the spot Bitcoin ETF market, has now made an application to the SEC. There are currently 13 different applications awaiting SEC approval. The intense competition faced by giants such as Fidelity and BlackRock suggests that, in the event of collective approval, companies may need to allocate significant marketing budgets to attract more customers. The growing interest in Bitcoin ETFs could be considered good news as it may increase the supply shortage on exchanges.
Pando Asset AG’s application indicates that Coinbase Custody Trust Company will provide custody services as it does for others. Bank of New York Mellon will act as the trustee. Ridiculous rumors about BlackRock have been circulating, and it has been stated that the institution’s application addresses these risks. We had previously pointed out that these risk disclosures are present in all spot Bitcoin ETF applications. Yes, Pando is also mandatorily mentioning these risks.
Some of the risks can be listed as follows: The trading prices of many crypto assets, including Bitcoin, have experienced and may continue to experience extreme volatility. Further declines in the trading prices of Bitcoin could have a serious negative impact that could lead to the complete loss of the asset. The value of the shares is dependent on the fundamental investment characteristics of the digital asset as a cryptocurrency; the loss or damage of private keys can lead to the complete loss of the asset. Digital assets represent a new and rapidly evolving industry, and the value of the shares is dependent on the acceptance of Bitcoin. Changes in the management of the digital asset network that do not receive sufficient user and miner support can negatively affect the network’s growth and its ability to respond to challenges.
All these risks, even though they might be a one in a million chance, are risks that every ETF applicant must detail for each underlying asset.