Why a Bitcoin ETF Might Be the Worst Way to Enter Crypto – Motley Fool

On Friday, the U.S. Securities and Exchange Commission rejected the proposal by VanEck for a Bitcoin exchange-traded fund (ETF) that would have held the actual cryptocurrency rather than just Bitcoin futures. Submitted in March, the application sought to buy Bitcoin directly on the "spot" market and hold it in an ETF that investors could then buy into. For clarity, a futures-based ETF invests in indirect contracts to buy or sell an asset at a set date in the future.

While the SEC allowed two Bitcoin futures-based ETFs to begin trading last month, it would not authorize an ETF containing actual Bitcoin, citing in its 51-page report its frequent worries of possible manipulation and fraud, etc within the crypto market. Bitcoin dipped to around $62,000 when the SEC announcement came down, but it has rebounded to more than $64,000 as of this writing.

While many investors like the diversity of an ETF, with its trading flexibility of an equity, it's not a great way to invest in Bitcoin or any type of cryptocurrency for that matter. Here are some reasons why:

Ultimately, there are much better ways to dip your toes into crypto with easy-to-use, consumer-friendly choices such as PayPal or Coinbase. The irony of the SEC's decision to reject the Bitcoin spot ETF is completely consistent and aligned with Bitcoin's ethos and founding principles. Bitcoin was created to remove expense ratios, commissions, hidden fees, and in-betweeners from financial transactions -- not inject them into the crypto purchasing process. So a hearty "thank you" in response to the SEC's most recent ETF thumbs down.

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Why a Bitcoin ETF Might Be the Worst Way to Enter Crypto - Motley Fool