Crypto ETFs are &#039, Dragging Along &#039, the Cons of Traditional Finance: Sygnum

Wall Street’s implementation of bitcoin ETFs has brought billion into Bitcoin and Ethereum, but Swiss-regulated online resource banks Sygnum argues these resources weaken crypto’s key benefits.

Max Stuedlein, head of corporate digital resource solutions at Sygnum Bank, claimed that the “regular industry hours” that crypto exchange-traded money use to comply with have become a barrier to unlocking the value of bitcoin.

In for use instances, investors are” only dragging along a lot of the drawbacks of traditional financing”, Stuedlein told .

Stuedlein highlighted certain limitations: limited trading days, reduced cash, and the loss of crypto’s 24/7 accessibility—precisely the features attracting some traders 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. In other words, package Bitcoin into an ETF format strips away important features that make crypto beautiful in the first place—such as 24/7 investing, immediate possession, and decentralized access, according to Stuedlein.

Sygnum provides organisational and approved investors with bank, trading, and property management services for crypto. It was the world’s second digital resource bank licensed by Switzerland’s financial regulation, FINMA.

The lender sees a growing geopolitical gap between specialised crypto-native institutions and conventional finance players, who are now flooded with ETF products, Studedlein 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 creating products and services on the online resource because that’s where the price is going to come from”, Stuedlein explains. A better course of action is to focus on the core digital assets and the advantages they offer as opposed to attempting to cram in more assets into a conventional structure.

The U.S. SEC has for the first time acknowledged a number of ETF proposals besides Bitcoin and Ethereum, which had “open the floodgates” for extra capital, according to Vectorized CIO Matt Hougan.

Analysts from JP Morgan released a report earlier in January that predicted potential inflows of$ 3 to$ 6 billion for Solana ETFs and$ 4 to$ 8 billion for XRP products, if approved.

Sygnum, which manages over$ 4.5 billion across 65 nations and achieved unicorn status earlier this year, claims to represent a thick ground—a regulated banks embracing cryptocurrency potential while questioning whether Wall Street’s method dilutes crypto’s important benefits.

Instead of trying to create a traditional product that references a digital asset, Stuedlein advised,” Take a look at ] the benefits that digital assets are bringing and build the services on that.”