After years of waiting, the market is likely to usher in four US bitcoin ETF in the coming weeks.
This month, the Securities and Exchange Commission (SEC) will again have to approve, reject or postpone a series of applications for exchange traded funds (ETF) based on the largest digital currency, just as Bitcoin once again passed the $55000 mark.
This time, the new ETF applications follow a structure that SEC chairman Gary Gensler has previously said could be welcomed by regulators. The ETF will hold bitcoin futures, not the digital assets themselves, and file applications under the Investment companies Act of 1940 (Investment Company Act), in an effort to provide greater protection for investors.
All this gives hope to the $6.7 trillion US ETF industry, which, after years of procrastination, may finally be ready to join the feast. During this period, dozens of cryptocurrency exchange-traded products have been launched in Canada and across Europe.
"We are very optimistic about the approval," said James Seyffart, an ETF analyst at Bloomberg Intelligence. "We are unlikely to see Gensler and SEC make positive comments on the new bitcoin futures ETF at the end of September and then deny it completely in less than a month."
SEC asked the two issuers to withdraw their ethernet futures ETF documents in the US summer, but did not make such a requirement for similar bitcoin-based applications, further raising the hopes of cryptocurrency advocates.
This week, it also approved Volt Crypto Industry Revolution and Tech ETF (BTCR.US). According to its prospectus, the actively managed product plans to invest most of its assets in companies with "exposure to bitcoin and its supporting infrastructure". This is one of a series of efforts to provide investors with indirect access to cryptocurrencies.
"given that ETF publishers have been pursuing bitcoin ETF for more than eight years, it seems a bit hypocritical that SEC encourages more applications at this time just to disapprove them," said Nate Geraci, president of ETF Store, a consultancy. "the approval of futures-based Bitcoin ETF appears to be a forward-looking 'victory' in encryption technology shown by SEC and Gensler in the United States."
Seyffart said that as long as SEC does not treat different applications differently and follows the usual procedures, ProShares's products are likely to be the first to be approved by regulators, after the company first submitted an appropriate futures-based application.
Valkyrie Investments, a smaller start-up publisher, also has a good opportunity, he says. It applied a week later than ProShares, but the proposed ETF will hold only bitcoin futures. By contrast, the terms included in the ProShares application will allow its fund to hold bitcoin-related instruments.