Bitcoin futures ETF will likely be delayed until 2022
According to Todd Rosenbluth, senior director of ETF and mutual fund research at CFRA, crypto-asset investors may have to wait longer for a Bitcoin futures exchange-traded vehicle.
While a Bitcoin futures product is expected to be the first crypto ETF to get clearance, Rosenbluth warned on CNBC’s “ETF Edge” on Oct. 12 that the present murky regulatory environment may create more delays.
The Securities and Exchange Commission has failed to approve any of the more than 20 crypto asset-based exchange-traded products that have been submitted, instead of kicking the can down the road several times.
To prevent a “first-mover advantage,” the researcher speculated that authorities could be waiting for all of these goods to achieve their objectives before approving them all at the same time.
“It’s feasible — in fact, we believe it’s likely — that a Bitcoin futures ETF will be delayed until 2022 until the regulatory situation is clearer.”
The SEC’s major worry, according to Van Eck Associates CEO Jan van Eck, is the disparity between actual Bitcoin values and the price of the futures contract, as well as the risk of funds being too large.
Futures strategies may underperform by as much as 20% a year during a Bitcoin boom, he said, before adding, “the SEC needs some insight into the underlying Bitcoin markets.”
Van Eck also indicated that the regulator needs to acquire greater control over cryptocurrency trading, which it looks to be doing with its recent warnings against Coinbase and its stablecoin loan program. Robinhood and other popular trading platforms are already regulated and licensed as broker-dealers.
Analysts have speculated that major investors may be purchasing BTC in expectation of an ETF clearance this month, thus any talk about a possible delay might hurt the Bitcoin price. The asset has risen 37.5 percent in the last two weeks, reaching a local high of $58,000 on Oct. 12, but additional regulatory dithering may derail the present rally.
Eric Balchunas, a senior ETF analyst at Bloomberg, believes there is still a 75 percent probability that an ETF will be authorized this month.
The SEC gave four BTC ETFs — the Global X Bitcoin Trust, Valkyrie XBTO Bitcoin Futures Fund, WisdomTree Bitcoin Trust, and Krypto in Bitcoin ETF — a 45-day extension earlier this month.
The SEC set a decision date of Nov. 14 for Van Eck’s physically-backed Bitcoin ETF, which was postponed for the second time this year in September.