The post Crypto ETFs are ‘Dragging Along’ the Negatives of Traditional Finance: Sygnum appeared on BitcoinEthereumNews.com.

Wall Street’s adoption of crypto ETFs has brought billions into Bitcoin and Ethereum, but Swiss-regulated digital asset bank Sygnum argues these funds weaken crypto’s core benefits. Speaking with Decrypt at Consensus in Hong Kong on Wednesday, Max Stuedlein, head of strategic digital asset solutions at Sygnum Bank, argued that the “regular market hours” that crypto exchange-traded funds operate with for compliance have become a hindrance to unlocking the value of crypto. In such use cases, investors are “just dragging along a lot of the negatives of traditional finance,” Stuedlein told Decrypt. Stuedlein highlighted specific limitations: restricted trading hours, reduced liquidity, and the loss of crypto’s 24/7 accessibility—precisely the features attracting many investors to digital assets in the first place. “When you wrap [Bitcoin] into something traditional like an ETF, you just destroy all of that interest,” Stuedlein said. Sygnum provides institutional and accredited investors with banking, trading, and asset management services for crypto. It was the world’s first digital asset bank licensed by Switzerland’s financial regulator, FINMA. The bank sees a growing strategic divide between specialized crypto-native institutions and traditional finance players, which are now flooding the market with ETF products, Stuedlein added. While U.S. spot Bitcoin ETFs have accumulated $110 billion or 5.89% of Bitcoin’s market cap, and spot Ethereum ETFs with $10.37 billion (3.15% of ETH’s market cap), according to CoinGlass data, Sygnum argues these vehicles fundamentally compromise what makes crypto unique. “For us, it’s about building products and services on the digital asset because that’s where the value is going to come from,” Stuedlein explains. “Focusing on the core digital assets and the benefits they bring rather than trying to shoehorn additional assets into a traditional structure is a better way forward.” It follows a slew of ETF proposals beyond Bitcoin and Ethereum being acknowledged by the…

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Filed under: News - @ February 20, 2025 8:23 pm