Wall Street could get four Bitcoin futures ETFs by month-end
After waiting for years for a U.S. Bitcoin Exchange Trade Fund, the cryptocurrency community might finally receive four products within weeks.
The Securities and Exchange Commission will once again have to approve, deny, or delay an assortment of exchange-traded fund applications based on the largest virtual currency. They all follow a format suggested by Gary Gensler, SEC Chair, that could be accepted favorably by regulators.
They will hold Bitcoin futures, not the digital asset, and they are filed under the Investment Company Act of 1940 – a route that provides greater investor protection.
All this is raising hopes in the US ETF industry worth $6.7 trillion. And, after years of delays and long delays, the largest market in the world may finally be ready for the party. Numerous cryptocurrency-exchange-traded products have been launched across Europe and Canada in the past year.
James Seyffart (an ETF analyst with Bloomberg Intelligence) stated that he is bullish about approval. “We don’t see Gensler or the SEC making positive comments about the 1940-act Bitcoin futures ETF at September’s end, and then denials all of them less that a month later.”
The regulator requested two issuers to pull their Ethereum-futures ETF filings in the U.S. this summer. However, it did not make similar demands for other Bitcoin-based applications.
It also approved Volt Crypto Industry Revolution (ticker: BTCR) and the Tech ETF (ticker TBC). According to the prospectus, the actively managed product intends to invest most of its assets in companies that ‘have exposure to Bitcoin and its support infrastructure. This is one of many efforts to provide investors with at least indirect access to cryptocurrencies.
“Given that ETF-issuers have been relentlessly pursuing Bitcoin ETFs over eight years, it seems somewhat disingenuous of the SEC to encourage further filings at this stage only to disapprove these,” said Nate Geraci from the ETF Store, president. Chair Gensler and the SEC seem to have found a way to make crypto more forward-thinking by approving futures-based Bitcoin ETFs.
ProShares products could be the first to receive the approval of the regulator if the SEC does not discriminate among the filings and follows the normal process. ProShares was the first company to file the proper futures-based filing, according to Seyffart at BI.
He said Valkyrie Investments (a smaller upstart issuer) also has a good chance. Although it filed one week later than ProShares, the proposed ETF would only hold Bitcoin futures. ProShares’ application, however, includes clauses that would allow its fund to hold Bitcoin-related instruments.
According to BI’s tally, there were nine Bitcoin futures applications still in the queue at the beginning of the month. Two were filed under the 1933 act, which allows stock exchanges and stock exchanges to list their products. Another application, filed under the 1940 Act, proposes to have a combination of Bitcoin futures and crypto equities. BlockFi Inc., a crypto lender, submitted a Friday application for a futures-based fund that would also invest short-duration fixed income securities and other investments.
Gemini Trust Co.’s twin founders Tyler Winklevoss and Cameron Winklevoss filed the first application to create a Bitcoin ETF in 2013. Because of concerns about the volatility and vulnerability of the crypto space, approval has been difficult to obtain for issuers over the years.
However, not all people are confident that approval will be granted.
“The odds of approval within the next month are greater than 50/50, however, I wouldn’t be surprised if this particular can was kicked down the road a few times more along with the physical Bitcoin ETF,” said Dave Nadig chief investment officer at ETF Trends, a data-provider. It is clear that a real regulatory plan is needed. Yet, we have not seen any indication that one will be forthcoming.