Bakkt CEO on the interconnection between crypto and the traditional financial system
In a cryptocurrency panel moderated by Jennifer Schonberger of Yahoo Finance, Bakkt CEO Gavin Michael discusses the future of cryptocurrencies and the traditional banking system.
JENNIFER SCHENBERGER: How does Morningstar recommend investors get exposure here? Just last week, the SEC gave the green light to the first Bitcoin futures ETFs. Certainly, this makes it easier for investors to gain exposure. But is this necessarily the best way? Perhaps they should also consider looking to cryptocurrency exchanges, as was the case before these ETFs, to invest in the underlying digital assets outright?
AMY ARNOTT: Yes, the ETF format therefore has many advantages. It gives you more transparency. It is easier to buy through an existing brokerage account. But since the two ETFs available so far in the US buy futures contracts, they likely won’t exactly track the price of Bitcoin. They could be maybe 5% or 10% off every year.
So they buy the first month futures contract. So, as these contracts are renewed, they will likely have to buy them at a higher price. I think we will eventually see a crypto ETF that tracks the spot price. But at this point, if you are looking to add crypto exposure to your portfolio, you are probably better off buying it directly through a crypto exchange or platform.