Sygnum, a Swiss-regulated digital assets bank, argues that the adoption of crypto ETFs by Wall Street has led to billions being invested in Bitcoin and Ethereum.
Talking with Decrypt Max Stuedlein of Sygnum Bank’s strategic digital assets solutions, spoke at Consensus on Hong Kong Wednesday. He argued that there is a need to improve the security and privacy in relation to data. "regular market hours" Crypto exchange-traded fund’s compliance requirements have become a barrier to the full value of cryptocurrency.
These use cases are of interest to investors. "just dragging along a lot of the negatives of traditional finance," Stuedlein told Decrypt.
Stuedlein highlighted specific limitations: restricted trading hours, reduced liquidity, and the loss of crypto's 24/7 accessibility—precisely the features attracting many investors 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.
Sygnum offers institutional investors and accredited clients banking, trading and asset management for cryptocurrency. It was the world's first digital asset bank licensed by Switzerland's financial regulator, FINMA.
Stuedlein noted that he believes there is a growing gap between traditional and crypto-native financial institutions, who now flood the market with ETFs.
The U.S. 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 building products and services on the digital asset because that's where the value is going to come from," Stuedlein explains. "Focusing on the core digital assets and the benefits they bring rather than trying to shoehorn additional assets into a traditional structure is a better way forward."
It follows a slew of ETF proposals beyond Bitcoin and Ethereum being acknowledged by the U.S. SEC for the first time, a trend that could open 'Floodgates' for additional capital, according to Bitwise CIO Matt Hougan.
JP Morgan analysts published an analysis in early January that projected potential flows between 3 to 6 billion dollars If approved, Solana’s ETFs could reach $4-8 billion and XRP-based products between $4 and $8 billion.
Sygnum manages more than $4.5 billion in 65 countries. The unicorns earlier this year, claims to represent a middle ground—a regulated bank embracing blockchain's potential while questioning whether Wall Street's approach dilutes crypto's fundamental advantages.
"Take a look at [what are] the benefits that digital assets are bringing and build the services on that, rather than trying to create a traditional product that references a digital asset," Stuedlein said.
Sebastian Sinclair is the editor