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Crypto ETFs: Mitigating fraud risk through regulated institutions

Published: 11 December 2024

Cryptocurrency exchange-traded funds (ETFs) allow investors to hold a variety of cryptocurrencies in a single investment product. While all of Canada’s Big Six banks now include some crypto ETFs in their portfolios, these investments represent only a small fraction of their holdings. A major advantage of ETFs is their ability to offer protection from market volatility. However, given the speculative nature of crypto means it can still be extremely volatile, even within an ETF structure. In the context of crypto, ETFs offer a different advantage, according to Assistant Professor of Finance at 鶹AV Desautels, Katrin Tinn. “Crypto trading platforms have a long history of collapse and fraud,” Tinn told The Logic, “and that risk is mitigated by having regulated financial institutions hold the underlying assets.

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