The U.S. Securities and Exchange Commission (SEC) has so far refused to approve Bitcoin ETFs. But experts now see good opportunities for Bitcoin futures ETFs in the US.
For years, well-known investment firms have been trying to launch Bitcoin ETFs in the U.S. market. But the U.S. Securities and Exchange Commission (SEC), as the regulatory body for such exchange traded funds, is getting in the way. Most recently, it again delayed a decision on several Bitcoin ETFs until winter. But market observers such as Bloomberg analyst Eric Balchunas believe bitcoin-based ETFs could still come as early as this fall. On Twitter, Balchunas estimates a 75 percent chance of a bitcoin futures ETF being approved in October.
Balchunas isn’t the only one mining the new optimism about Bitcoin ETFs from a speech by SEC chief Garry Gensler. The latter said last week his agency is experiencing applications for approval of Bitcoin ETFs based on BTC futures. In that combination, he said, the Investment Company Act of 1940 is the basis for making a decision. From Gensler’s perspective, this could likely provide investor protection and he looks forward to his team’s research findings. In any case, vehement rejection sounds different – even to Gensler, who has already described parts of the crypto industry as the “Wild West.”
Bitcoin futures ETFs would divert custody of underlying BTC from the issuer of the ETFs to those of the bitcoin futures. And Bitcoin futures have been approved in the U.S. for several years now with Project Bakkt as probably the best known example. Here, experience has already been gained in the sensitive topic of how to store Bitcoin securely. The SEC’s cautiously positive signals for Bitcoin futures ETFs are also associated with the success of similar financial instruments in Canada.
Bottom line: are bitcoin ETFs bringing fresh capital to BTC?
Balchunas admits that demand for classic Bitcoin ETFs would likely be much higher than for the version linked to Bitcoin futures. On the other hand, institutional investors in particular are increasingly looking for ways to add Bitcoin to their portfolios in a regulated environment. Here, Bitcoin futures ETFs could at least offer an option that does not yet exist in this way. Bitcoin futures took some time to attract significant capital. But now they are a backbone in BTC and have contributed to the positive price curve. It is hoped that Bitcoin futures ETFs will also have a similar effect.
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