Bitcoin ETF – Will it Ever Happens?
The newsletter featured fascinating insights from the Bitwise Asset Management team, clearly explaining both the history of Bitcoin ETFs, as well as what we should expect in the near-future. On July 1st, 2013, the Winklevoss Bitcoin Trust filed with the U.S. Securities and Exchange Commission (SEC). Today over 8 firms have submitted their own filings, including; SolidX (and Van Eck) as well as Grayscale and others.
All filings have either been denied delayed lsquo;indefinitely’ or withdrawn. Currently, only the SolidX/Van Eck and Bitwise filings are lsquo;still in process’ at the SEC, and feature review dates. Excitingly, Bitwise can reveal they are under what’s known as a lsquo;quiet period’ with the SEC. This means that the commission is carefully reviewing their application carefully, and any perceived undue influence on their decision could be fatal to their plans. In short- it’s a positive, albeit a tentative piece of news.
The SEC is NOT Anti-Crypto
Due to all the delays and rejections, many people in the community feel the SEC is anti-crypto. According to Bitwise, this could not be further from the case. They cite historical approvals of other asset classes, including:
- “More than six years between the first filing for a leveraged ETF and the first SEC approval;
- Nearly six years between the publication of the SEC’s first “conceptual release” on actively managed ETFs and the approval of the first active ETF;
- Nine years between the launch of the first ETF and the launch of the first fixed-income ETF, despite significant efforts in the interim.”
Timescale, therefore, is on track. Whether an ETF can be decided sooner rather than later really is up to the regulators and behavior of those participating in the markets.
How important is a Cryptocurrency ETF?
In short – very. As a lsquo;well-understood’ financial construct, such an ETF would be easily accessible to the majority of institutional and private investors. Out of 150 financial advisors interviewed, 58% said that an ETF would be their preferred conduit of investment. Better regulation (54%) would also make them more comfortable in allocating cryptocurrencies into their client’s portfolios.
Timeframe and US Government Shutdown
With no end in sight for the current United States Government shutdown, the current deadline for the SEC to decide (February 27th, 2019) is up in the air. Bitwise believes that:
lsquo;with 94% of SEC staffers furloughed, the likelihood of giving the filing a complete review is in doubt. Bitwise’s own filing is complicated by the shutdown as well.’
However, a positive, conciliatory note was also struck in their assessment of the current crypto ETF timeframe, with the team noting the great general strides and maturing of the industry and ecosystem. Greater local and international regulations will help improve wider understanding of this asset class and therefore assist in any future decisions for the SEC.
Make sure to check out Newconomy’s other great articles for all your cryptocurrency investment and educational needs.
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