Bitcoin index funds: Should Grayscale be worried? – Crypto Trendings
Tuesday, May 20, 2025
Crypto Trendings
  • HOME
  • News
  • Bitcoin
  • Altcoins
  • Business
  • Tech
  • Industry
  • Interviews
  • Press Release
No Result
View All Result
Crypto Trendings

Bitcoin index funds: Should Grayscale be worried?

Crypto Trendings by Crypto Trendings
December 15, 2020
in Bitcoin
Reading Time: 2min read
Bitcoin index funds: Should Grayscale be worried?

2020 has been an incredible year for many firms trying to incorporate Bitcoin into their larger financial systems. Grayscale took the leap first, in the minds of many, with Coinshares and Bitwise making noise as well. These Crypto-Index Funds are regulated and their main focus has been the market’s institutional investors.

For context, Grayscale currently holds over 2% of the total Bitcoin in circulation, and it is extremely appealing for investors that do not want to hold Bitcoin directly and purchase through an IRA or brokerage account.

Related posts

Expert Reveals “Best Bets” Against Impending Economic Collapse

Expert Reveals “Best Bets” Against Impending Economic Collapse

July 28, 2022
Meta A Bigger Threat For Crypto Crash Than The Fed, Here’s Why

Meta A Bigger Threat For Crypto Crash Than The Fed, Here’s Why

July 27, 2022

However, there are certain downsides and in this article, we will try to figure out if these crypto-index funds might face any competition in the future.

Is the future of Crypto-Index Funds Decentralized?

Bitcoin as an asset is based on the foundations of being decentralized, away from anyone’s control. Hence, these regulated crypto-trusts kind of take the idea of holding Bitcoin in a different direction for the market’s investors.

Now, even though the likes of Grayscale, Bitwise, and Coinshares are sizable businesses, these corporations fall under the extremities of the prevailing regulations. Ergo, they are not tradable on major exchanges. So, it is basically holding Bitcoin, which is harder to access and possibly less liquid due to its untradable nature.

In light of the complications around regulated crypto-funds, the rise of DeFi and its financial products might have a lot to say down the years.

The attached chart highlights a few DeFi index funds that have emerged to allow investors to get passive and diversified exposure to the crypto-industry. Some of the most prominent indices include sDeFi, DEFI++, $PIPT $DPI.

Now, some of the clear advantages for these indexes are that they are built on protocols that have processed more than $1.5 billion in trading volume. So, liquidity will never be an issue for the investor. Secondly, some of these indices also produce yield through trading fees and they are redeemable for the underlying assets.

The transparency is quite clear and DeFi protocols take out errors based on human judgment. While these indices can possibly take over on paper, their drawbacks are pretty evident as well.

For example, DeFi leads the banner of ‘impermanent loss’ on various products as perfection is still far from achieved. If the market of sDEFI is observed, its AUM is less than $2 million. For Grayscale, such a number is not even considered pocket change at the moment.

Verdict: What does the future look like?
For now, it is quite difficult for institutional investors to bestow interest in DeFi’s decentralized crypto-indexes. Institutional Interest has only arrived for Bitcoin, Ethereum in 2020, and Grayscale, Bitwise are clearing running away with high demand at the moment. So, while the future could move towards more decentralization with better emerging crypto-indexes, for the time being, Bitcoin will reach the hands of these accreditors via regulated corporations only.

Previous Post

Apple Co-Founder Wozniak-Backed Token Doubles in a Day

Next Post

New withdrawal mechanism for ETH2 stakes ‘under discussion’

Next Post
New withdrawal mechanism for ETH2 stakes ‘under discussion’

New withdrawal mechanism for ETH2 stakes ‘under discussion’

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

RECOMMENDED NEWS

SCBx Group moves its mothership strategy forward by announcing SCBS’ acquisition of Bitkub to partner in laying the groundwork for digital asset business

SCBx Group moves its mothership strategy forward by announcing SCBS’ acquisition of Bitkub to partner in laying the groundwork for digital asset business

4 years ago
Imagen Network (IMAGE) Launches the World’s First AI-Powered Decentralized Social Platform

Imagen Network (IMAGE) Launches the World’s First AI-Powered Decentralized Social Platform

6 months ago
Exploring the Unknown, Welcoming the Future: The 3T Space Escape Game is Coming

Exploring the Unknown, Welcoming the Future: The 3T Space Escape Game is Coming

1 year ago
bitFlyer to Pioneer Blockchain-powered Home Rentals Platform

bitFlyer to Pioneer Blockchain-powered Home Rentals Platform

5 years ago

BROWSE BY CATEGORIES

  • Altcoins
  • Bitcoin
  • Business
  • Industry
  • News
  • Press Release
  • Tech

BROWSE BY TOPICS

Altcoins Bitcoin Business Industry News Press Release Tech

POPULAR NEWS

Plugin Install : Popular Post Widget need JNews - View Counter to be installed
Crypto Trendings

We bring you the latest news in the crypto and finance industry. We envision the goal of completely decentralised future.

Reach us at:

[email protected]

BITCOIN NEWS

Expert Reveals “Best Bets” Against Impending Economic Collapse

Expert Reveals “Best Bets” Against Impending Economic Collapse

July 28, 2022
Meta A Bigger Threat For Crypto Crash Than The Fed, Here’s Why

Meta A Bigger Threat For Crypto Crash Than The Fed, Here’s Why

July 27, 2022
Why UST’s crash has experts talking and taking different sides

Why UST’s crash has experts talking and taking different sides

May 16, 2022

ALTCOIN NEWS

Ethereum price faces resistance at $650, can ETH break above?

Ethereum price faces resistance at $650, can ETH break above?

December 21, 2020
New withdrawal mechanism for ETH2 stakes ‘under discussion’

New withdrawal mechanism for ETH2 stakes ‘under discussion’

December 15, 2020
Ethereum King Buterin Loses Live Showdown to Twitch Chess Queen

Ethereum King Buterin Loses Live Showdown to Twitch Chess Queen

December 16, 2020
May 2025
M T W T F S S
 1234
567891011
12131415161718
19202122232425
262728293031  
« Apr    
  • About
  • Advertise
  • Careers
  • Contact

© 2020 Crypto Trendings

No Result
View All Result
  • Home
  • Industry
  • News
  • Business
  • Bitcoin
  • Interviews
  • Tech
  • Altcoins

© 2020 Crypto Trendings