Cryptocurrency investors may have to wait longer for an exchange-traded fund directly tied to physical cryptocurrency or their futures contracts, according to Todd Rosenbluth, senior director of the ETF and mutual fund CFRS.
In an interview with CNBC’s ETF Edge on Tuesday October 12, Rosenbluth disclosed that while a Bitcoin futures product is likely to be approved by the SEC first, the current gloomy regulatory climate could add further delays.
“We believe that we are more likely to see a Bitcoin futures ETF first.”
More than 18 companies are still waiting to see if their respective filings for Bitcoin-based ETFs will land in the public markets.
Rosenbluth stated that the SEC could wait for a clearer regulatory environment that would allow all of these crypto EFT products to achieve their goals and therefore approve all products at the same time in order to take advantage of the “first movers” to avoid.
“It is possible that we think it is likely – that we will see a delay in a Bitcoin futures ETF until 2022, until the regulatory environment is clearer,” said Rosenbluth.
Meanwhile, Jan van Eck, CEO of Van Eck Associates, was also part of the CNBC interview, revealing that the SEC’s primary concern is the potential for discrepancies between Bitcoin and futures prices, the risk of cross-border investments, and the potential for funds get too big and exceed the limits on the number of contracts they can own.
Van Eck illustrated that futures strategies can perform up to 20% per year on a Bitcoin rally. “The SEC wants some insight into the underlying Bitcoin markets,” he said.
Van Eck also suggested that the SEC is still trying to gain more control over trading in cryptocurrencies, and it is currently trying in a number of ways. For example, the regulator recently stopped Coinbase to offer a loan product. Other popular trading platforms like Robinhood have already registered with the SEC and are regulated as broker-dealers.
Achieving such regulatory scrutiny could improve the Bitcoin futures ETF’s chances, but it’s unclear by how much, Van Eck said.
“They clearly have some control over the players in the underlying bitcoin markets, so that might increase the odds from zero, but I have no idea what they are,” he said.
Investors rely heavily on crypto
Bitcoin rose 35% in the past two weeks, hitting a high of $ 57,000 on Tuesday, October 12, as investors increased their optimism about the SEC’s plans for several Bitcoin ETF applications under review.
However, any speculation about a possible delay could have a detrimental effect on the prices of the flagship cryptocurrency, as analysts suggested that large investors could buy bitcoins pending ETF approval this month.
Eric Balchunas, Bloomberg’s senior ETF analyst, remains confident that the SEC has a 75% chance of approving an ETF this month.
Other analysts, such as Ulrik K. Lykke, founder of the crypto / digital assets hedge fund ARK36, remain skeptical in the foreground of the approval of Bitcoin ETF:
“Historically, expectations of investment vehicles and instruments with a more institutional grade for Bitcoin have often ended in a“ buy the rumor, sell the news ”scenario; A Bitcoin ETF will have an overall positive impact on the development of the space, but is unlikely to lead to an immediate dramatic increase in institutional uptake of digital assets. “
Earlier this month, the SEC extended the deadlines of four Bitcoin Exchange Traded Funds (ETFs) by 45 days, citing the need for additional time to decide whether to accept the 19b-4 applications.
On October 1, the regulator approved four Bitcoin ETFs – Global X Bitcoin Trust, Valkyrie XBTO Bitcoin Futures Fund, WisdomTree Bitcoin Trust and Kryptoin Bitcoin ETF – on November 21, December 8, December 11 and December 24, respectively December postponed.
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