Virtual assets that are now recognized as investment products

There are still quite a few people who have doubts about its value. With the new government, there will be a way to invest in virtual assets in the domestic stock market.

The new government is expected to bring a way to invest in virtual assets in the domestic stock market.

Both the two major parties, People's Power and Democratic Party, have it on the agenda to institutionalize the virtual asset market as a presidential election pledge. Since the two large parties with a high possibility of a president have the same voice, it is worth expecting that no matter who becomes president, they will implement policies in favor of the virtual asset market.

Ahead of the early presidential election on June 3, politicians announced their pledges on virtual assets to win the votes of coin investors. Now that there are quite a few people who are interested in or investing in virtual assets, it could affect the election.

The direction of pledges is slightly different depending on the candidates and political parties' tendencies. Some put weight on fostering the virtual asset industry and revitalizing the market, while others put weight on supporting the formation of assets for young people and protecting investors. However, both sides have the same purpose of their pledges to establish the coin market systematically.

However, there is something mentioned in the pledge related to virtual assets made by political parties or presidential candidates. It is the introduction of a virtual asset exchange-traded fund (ETF).

An Exchange Traded Fund (ETF) is a fund that makes a major stock index keep up with the rise or fall of a major stock index simply by buying and selling like a stock. When I think of 'fund', I usually think of products that go to a financial company to sign up and cancel, rather than buying and selling with a few clicks like stocks. After a customer joins a fund, a financial company that receives a commission takes over the investors' money and invests it instead.

ETFs are products that allow you to invest as if you were just buying stocks instead of putting money into a fund and going to join. Financial companies still invest for me, but they invest in a much clearer way. It's not complicated to choose stocks, it's just investing to follow the major stock indexes.

For example, if you want to invest in the S&P 500, the leading U.S. stock index, you can buy an ETF that follows the S&P 500, or if you want to invest in the flow of Korea's leading stock index, the KOSPI, you can buy an ETF that follows the KOSPI. When you want to invest in the semiconductor industry, you can buy ETFs linked to semiconductor-related stock indices.

Still, financial companies earn profits from fees for managing ETFs, but they only receive much less fees than regular funds. There's not much to do compared to regular funds.

A virtual asset spot ETF is an ETF that makes it follow the price flow of virtual assets such as Bitcoin. ETFs originally follow stock indexes based on stocks, but they have also started applying ETFs to new investments called coins. In January of last year, Bitcoin spot ETFs received global attention as they were approved for transactions in the U.S. There have been previous cases introduced in Canada or Germany, but trading in the United States, the center of the global financial market, meant a clear "entry into the institutional sphere" of virtual assets, so it had a great impact.

Bitcoin ETFs invest in Bitcoin instead of investing in multiple stocks like regular ETFs. A financial company that makes and sells bitcoin ETFs buys bitcoin directly and holds it for that amount. Investors buy "bitcoin ETFs" on the stock market, but the financial company that sold the ETF buys bitcoin and distributes profits or losses, so it actually looks like investing in bitcoin.

You might have thought, "If you want to invest in bitcoin, can't you just buy bitcoin?" Actually, that’s true. Investors get similar results whether they buy bitcoin ETFs on the stock market and invest in bitcoin's price flow or buy bitcoin directly. Investing in Bitcoin, which has a high price, through the stock market does not mean that it is a more stable investment.

This is the difference between direct trading of virtual assets and ETF trading.

① Investment accessibility is improved by being able to live in the stock market.

② If you buy ETFs, investors don't hold bitcoin directly. (You can't use bitcoin)

③ ETF trading is recorded as financial transactions through regular stock markets.

If you've only invested in stocks before, you can feel that the official stock market is more comfortable and secure than joining a cryptocurrency exchange created by several private companies. Even companies that were reluctant to buy virtual assets directly tend to view ETFs as investment assets. It significantly lowers the psychological and institutional barriers that investors face.

Presidential candidates' calls for the introduction of virtual asset ETFs also seem to be a result of considering this context. The policy of institutionalizing the coin market, which seems a little dangerous, is likely to be positively accepted by investors. It is said that the number of members of the domestic virtual asset exchange has exceeded 16 million.