Amid the highly-anticipated approval of Bitcoin spot exchange-traded funds (ETFs), which has sparked excitement within the crypto industry and opened doors for institutional investments, the International Monetary Fund (IMF) managing director, Kristalina Georgieva, has expressed critical views towards the nascent sector.
Are Crypto Assets Not Equivalent To Money?
In a recent interview with Yahoo Finance, Georgieva emphasized the distinction between money and crypto assets when discussing cryptocurrencies.
According to Georgieva, crypto should be regarded as an asset class rather than a form of currency. She highlighted the alleged varying levels of security and risk associated with different cryptocurrencies, depending on whether assets back them. Georgieva likened crypto to a money management fund rather than a true form of money. The International Monetary Fund Director claimed:
Our view is that we have to differentiate between money and assets. When we talk about crypto, we are actually talking about an asset class. It could be backed up and in that sense, more secure and less risky, or it could be not backed up and therefore a riskier investment. But it is not exactly money. It’s more like a money management fund
Interestingly, according to Yahoo, Georgieva’s comments came just hours before the US Securities and Exchange Commission (SEC) approved the launch of new spot Bitcoin-backed ETFs.
This regulatory green light allows financial institutions like Cathie Wood’s Ark and BlackRock to introduce these ETFs. A total of 11 spot Bitcoin ETFs were approved, enabling average investors to gain exposure to the world’s largest cryptocurrency without the need to own it directly.
While the debut of the Bitcoin ETFs marks a significant milestone for the crypto industry and signals growing institutional acceptance, Georgieva remains cautious about the potential of cryptocurrencies to rival traditional currencies like the US dollar.
Georgieva underlined the dollar’s dominance, which is “supported” by the size of the US economy and the depth of its capital markets. Georgieva believes that any scenario where cryptocurrencies challenge the dollar’s stature is still far in the future and not a pressing concern.
Analyst Urges Investors To Embrace The Bitcoin Dip
The approval of spot Bitcoin ETFs has been heralded as a landmark day for the crypto industry, with industry experts anticipating a surge in investments.
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Analysts like Gautam Chhugani from Bernstein advise investors to view any minor selloffs as opportunities, emphasizing the asymmetric upside potential of Bitcoin. Chhugani stated:
Our simple advice to all investors is — to buy the dip and focus on the new bitcoin adoption cycle. The minor selloffs are opportunities in view of the asymmetric upside ahead
On the other hand, Coinbase Chief Financial Officer Alesia Haas sees the ETF approval as a catalyst that will attract trillions of dollars previously unable to access crypto assets.
Since the approval of the ETFs, Bitcoin has experienced a retracement, currently trading at the $42,700 level, representing a 6% decline over the past seven days. The long-term impact of the ETFs on Bitcoin’s price and the broader industry is yet to be determined.
Featured image from Shutterstock, chart from TradingView.com