TL;DR
The SEC approved spot Bitcoin and Ethereum ETFs in 2024, generating excitement for future crypto ETFs, including Shiba Inu (SHIB).A SHIB ETF could make investing easier and increase demand, but it is also focused on centralized control and additional fees.The Pluses
2024 has been quite fruitful in terms of groundbreaking events surrounding the cryptocurrency industry. For instance, the US Securities and Exchange Commission (SEC) finally greenlighted spot Bitcoin (BTC) and Ethereum (ETH) exchange-traded funds (ETFs).
The approvals were met with huge enthusiasm from industry participants, with some predicting that such financial products with different underlying assets may also see the light of day in the near future.
In a recent X post, Shibarium’s Marketing Strategist – LUCIE – explained why a SHIB ETF would be a “great” option. The first outlined plus was “accessibility.”
“A SHIB ETF would make it easier for traditional investors to gain exposure to Shiba Inu without needing to navigate cryptocurrency exchanges,” the post reads.
LUCIE noted that exchange-traded funds are regulated monetary products that offer additional security and could attract institutional investors. Diversification and increased demand for the meme coin were also placed on the list of advantages.
Spot crypto ETFs have even more pluses. As CryptoPotato previously explained, investors who purchase products of that type don’t have to worry about storing and safekeeping their holdings or dealing with crypto exchanges.
What About the Minuses?
On the other hand, LUCIE outlined several reasons why launching a SHIB ETF “might not be great for DeFi.” The X user said ETF investors would miss out on engagements like staking and governance due to not directly owning cryptocurrencies.
Additionally, exchange-traded products involve management fees and regulatory supervision and could potentially lead to “market manipulation.”
“ETFs might centralize SHIB control, potentially leading to market manipulation, contrasting DeFi’s transparency while offering stability to volatile markets. In essence, the impact of a SHIB ETF on DeFi varies based on perspective, balancing benefits with potential drawbacks in decentralized finance. So it’s a double-edged sword situation where we need to decide what is better for ourselves,” LUCIE concluded.
Meanwhile, for more updates on the ecosystem, make sure to check out our Shibarium news section.