If you have followed the Bitcoin industry’s news cycle over the past two or three years, you likely would have noticed an incessantly recurring trend: Bitcoin exchange-traded funds (ETFs).
This is for good reason: these financial vehicles, which have yet to appear in U.S. markets as a regulated product, are believed by some analysts to be the catalysts that will propel the cryptocurrency market from a fringe trend to a mainstream industry, for it would allow for both retail and institutional investors with access to billions to easily invest in Bitcoin.
These ETFs have been such a trend that around half a dozen firms have filed applications and have subsequently seen those applications, uh, rejected by the U.S. Securities and Exchange Commission (SEC), the financial regulator presiding over this part of the Bitcoin market.
The ETF narrative recently lost even more steam with a hopeful revealing that it, too, has no hope that a fully-fledged fund tracking Bitcoin will make it to public exchanges in the near future.
VanEck Believes Bitcoin ETF Won’t Happen, Yet
One of the leading firms in the Bitcoin ETF rat race is VanEck, an investment management firm headquartered in New York, NY known for its quirky funds. The firm has been one of the most outspoken in trying to get a fund approved, claiming that it would make this market extremely robust.
But, the CEO of VanEck, Jan Van Eck, recently tossed cold water on his firm’s own attempt to appease Bitcoin investors. Speaking with Bloomberg, he said:
“I agree with some commentators; I don’t see a Bitcoin ETF being approved any time soon. Yes, vehicles that allow QIBs or accredited investors to access Bitcoin is fine, but still, tens of millions of Americans invested in Bitcoin with regulatory protection.”
So yes, while Van Eck is identifying a need for a regulated way for retail investors to buy Bitcoin, he doesn’t think a fund will get approved by the SEC.
The CEO of VanEck isn’t the only one worried about an ETF’s prospects.
Noted Bitcoin bull Tom Lee, who is the co-founder of investment firm Fundstrat Global Advisors, said in Singapore at an event last year that BTC will need to trade at $150,000 per coin to allow for “the market to cope with the daily demand of an ETF.”
There’s also Brian Kelly, CEO of BKCM, who said in a CNBC segment last year that he doesn’t believe this industry needs a Bitcoin ETF to succeed due to the involvement of Fidelity Investments and other institutional players.
Precursors to Bitcoin ETF Approval Appear
Although these analysts are sure that the approval of a Bitcoin ETF isn’t coming anytime soon, there are signs that progress is being made, albeit somewhat slowly.
In December, the New York Digital Investment Group (NYDIG) revealed that it procured a green light from the SEC to launch the NYDIG Bitcoin Strategy Fund, a portfolio fund in the Stone Ridge Trust Vl.
This fund will invest in cash-settled Bitcoin futures contracts traded on Commodity Futures Trading Commission-approved exchanges, like the CME Group, which has its own BTC futures contract.
According to a research note from Mike McGlone, a commodities strategist at Bloomberg Intelligence, shared by cryptocurrency commentator Light, the approval of the so-called interval fund from NYDIG improves the “odds of a Bitcoin ETF in 2020 to 50-50.” McGlone elaborated, writing:
“Approval shows that lobbying by issuers such as VanEck and Bitwise is starting to pay off.”
Up north, Canada’s securities regulator in the province of Ontario, the Ontario Securities Commission approved crypto fund manager 3iQ to begin the process of listing a Bitcoin ETF on public stock exchanges.