Citadel Securities Ready for Crypto ETFs When Regulators Approve

Citadel Securities, a global trading juggernaut, will be ready for cryptocurrency exchange-traded funds (ETFs) if and when they are approved by regulators according to a Bloomberg interview with Citadel’s head of ETF group, Kelly Brennan. 

“We will be ready if and when those products are approved, but we are taking a measured approach,” Kelly Brennan said, quoted by Bloomberg. However, she also noted that the financial services company would be calculated in their approach. 

The benefit of a Bitcoin ETF is it would give investors access into the cryptocurrency without the need to secure it in a wallet or by another means. In other words, a Bitcoin ETF would act and operate like other ETFs or other stocks. 

ETF issuers in the US have been trying to launch an ETF that holds Bitcoin as a way to gain further access into the digital asset, but regulators have been consistently denying their requests, noting Bitcoin’s volatility as one of the largest reasons. In fact, the Securities and Exchange Commission, SEC, denied this very application last week from One River Asset Management. 

However, last year, the SEC allowed an ETF that tracks Bitcoin futures, which roughly follows the coin’s spot price indirectly. 

Kenneth Griffin, founder and CEO of Citadel Securities, has asked the SEC to establish crypto rules and regulations instead of just talking about them and debating them. He believes this is the major issue keeping out liquidity and other services from digital assets. Once regulations are set, Griffin believes “tier-one” firms will start to provide such services. 

Citadel also believes that customers wanting to be a part of crypto and the digital asset world are already finding ways to do so, without needing an ETF to help them. However, once approved, they are also ready to pounce on the opportunity and provide their clients with new capabilities. 

Though the futures funds from ProShares, VanEck and Valkyrie are not as popular as these companies originally hoped for, they are providing investors more exposure into the market. Furthermore, these companies are still seeking to release a spot Bitcoin ETF if approved. Grayscale Investments LLC, is one example of a company pushing hard to convert its Bitcoin trust into a spot Bitcoin ETF. 

While there is still tremendous hope for ETFs that hold crypto-related stocks, or stocks that are involved in the digital asset world, they have not been performing well. The six worst-performing non-leveraged ETFs in 2022 are all crypto-linked equity funds, according to Bloomberg. 

This in part is due to a very rough year in crypto, especially after the collapse of TerraUSD (UST), which saw the former third-largest stablecoin go from its peg, $1, down to $0.0145, according to Bitpush Terminal data. 

Furthermore, the king of crypto, Bitcoin, has gone from its high on the year of just over $47,000 down to where it currently sits: $29,907. Bitcoin is currently in an almost month-long consolidation period, where the price has fluctuated from about $28,200 to $32,200. Many different pundits have weighed in on the direction of Bitcoin during this time, but there have been no breakouts in either direction. 

The Fear and Greed index for Bitcoin currently sits at 15, which is slightly worse than yesterday’s 13, but better than last months 18. 

Author: Tyler Irvin

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