Bitcoin futures ETF approval more likely to be delayed till 2022, market analyst says

Bitcoin backers could have longer to attend for an exchange-traded fund instantly tied to the cryptocurrency or its futures contracts, CFRA Analysis’s Todd Rosenbluth advised CNBC’s “ETF Edge” on Monday.

The worth of bitcoin has climbed 35% within the final two weeks as traders grew optimistic in regards to the Securities and Alternate Fee’s plans for the quite a few bitcoin ETF functions presently below its evaluate.

Greater than a dozen companies are nonetheless ready to listen to whether or not their respective filings for bitcoin-based ETFs will progress to the general public markets. Others, together with VanEck, Invesco, Amplify ETFs and International X, have launched tangential merchandise targeted on blockchain infrastructure or the broader cryptocurrency economic system.

“We expect we’re extra more likely to see a bitcoin futures ETF first,” mentioned Rosenbluth, senior director of ETF and mutual fund analysis at CFRA.

VanEck, ProShares, Invesco, Valkyrie and Galaxy Digital have all filed for bitcoin futures ETFs. The primary 4 may very well be authorised, denied or have their choices delayed by mid- to late October; Galaxy Digital’s destiny shall be revealed by Nov. 1.

“It is a timing difficulty,” Rosenbluth mentioned. “Does it occur in 2021 or does it transfer to 2022 so all of those merchandise that … might meet the objectives truly are authorised and may launch on the similar time as a substitute of getting a first-mover benefit?”

“It is doable — the truth is, we predict it is probably — that we will see a delay of a bitcoin futures ETF till 2022, till the regulatory atmosphere is extra clear,” he mentioned.

The SEC is especially involved in regards to the potential for discrepancies between bitcoin and futures costs, the potential for funds to get too giant and push the boundaries on what number of contracts they’ll personal, and the chance of cross-border funding, Van Eck Associates CEO Jan van Eck mentioned in the identical interview.

“In bitcoin rallies, bitcoin futures methods can underperform by even as much as 20% a 12 months,” van Eck mentioned. “The SEC desires to have some visibility into the underlying bitcoin markets.”

As for regulatory management, the SEC already wields it in a number of methods on the subject of cryptocurrency buying and selling, van Eck mentioned.

Robinhood, which presents crypto buying and selling, falls below the SEC’s jurisdiction as a result of it’s registered as a broker-dealer, van Eck mentioned. The SEC additionally could have achieved “de facto regulatory management” over Coinbase, which stopped providing a lending product a number of weeks in the past on the fee’s request, he mentioned.

That would assist the bitcoin futures ETF’s probabilities, however it’s unclear by how a lot, the CEO mentioned.

“They clearly have some management over gamers within the underlying bitcoin markets, so possibly that will increase the possibilities from zero, however I do not know what they’re,” he mentioned.

Along with the tender Oct. 25 approval deadline for VanEck’s bitcoin futures ETF submitting, the SEC has a tough Nov. 14 deadline to approve or deny VanEck’s proposal for an ETF primarily based on bodily bitcoin.

Disclosure: Invesco is the sponsor of CNBC’s “ETF Edge.”

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