The cryptocurrency industry has been highly anticipating the debut of a bitcoin exchange-traded fund (ETF) by the end of 2018. But, some analysts believe it will not arrive until next year.
Potential Impact of a Bitcoin ETF
As a publicly-traded instrument, a bitcoin ETF has the ability to open a floodgate of capital from retail traders and individual accredited investors in the US public market. Dissimilar to direct investments on cryptocurrency exchange platforms, issuers of a bitcoin ETF are responsible for protecting the funds of investors and insuring them, as a trusted intermediary.
Hence, investors who previously were reluctant towards investing in the cryptocurrency sector due to security and compliance concerns, will likely invest in the cryptocurrency market through ETFs.
As cryptocurrency investor and widely recognized content creator Nicholas Merten said:
“Here’s why a bitcoin ETF matters: With the release of an ETF, this allows investors to add BTC to their retirement portfolio. Global Pensions Market: $41.3 trillion If BTC captures just 1% of global pensions, that would create $413,000,000,000 of exposure for cryptocurrencies.”
The majority of the investors, analysts, and researchers in both the cryptocurrency market and traditional finance sector have expressed optimism towards the approval of a bitcoin ETF. Kevin O’Leary — AKA Mr. Wonderful, one of the four stars of Shark Tank — who has been skeptical towards the regulatory aspect of BTC since early 2017, has said that the approval of a bitcoin ETC could potentially lead institutional investors to commit to the market in the near future.
However, Brian Kelly, the CEO at BKCM and CNBC’s Fast Money contributor, has said that the first bitcoin ETF will not be approved within 2018, given the history of the SEC of delaying bitcoin ETFs and any newly emerging asset class.
“I also hope there is an ETF. But I think the chances of a bitcoin ETF in 2018 are relatively low. There is still quite a few things. That doesn’t stop speculation on that. That’s one reason why we’ve seen this bottoming process here from $5,800 to $8,500.”
CBOE Entrance is Relevant
The Chicago Board Options Exchange (CBOE), one of the world’s biggest options exchanges alongside CME Group, has recently filed a bitcoin ETF application with the SEC to bring BTC to the public stock market in the US.
Previously, the US SEC justified its rejection of a BTC ETF by claiming the overseas cryptocurrency market lacked proper regulatory frameworks around cryptocurrency exchanges and the lack of financial institutions monitoring cryptocurrency trades.
Over the past 12 months, overseas regulation on cryptocurrency has improved drastically, and as a strictly regulated exchange, the CBOE has extensively analyzed the impact of its BTC futures market on the global cryptocurrency sector.
With the entrance of CBOE into the bitcoin ETF market and the persistent efforts by the Winklevoss twins, Gemini, and SolidX, it is likely that the cryptocurrency market will see the approval of a BTC ETF relatively soon, but investors are skeptical towards a BTC ETF by the end of 2018.
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Last modified: March 4, 2021 4:05 PM