Many are looking forward to having a Bitcoin ETF. However, things weren’t working according to people’s expectations. In fact, the US Securities and Exchange Commission is quite concerned regarding the possibility of market manipulation. Now, will there even be a Bitcoin or crypto related ETF in the near future?
ETF by February?
According to crypto analyst Brian Kelly, he thinks that the most likely date and the earliest might be around in February next year. He mentioned that though the VanEck and Solid X Bitcoin proposal has been delayed to next month, there is still a chance that the regulator will opt to defer its final decision yet again by February.
He thinks that the US SEC is looking to delay it further mainly because of a number of points. One, Kelly thinks that there is always that chance of manipulative acts and practices considering the insufficient sized Bitcoin derivatives market, not to mention the unregulated spot market. He said that “(When) the SEC talked about fraud and manipulation, it wasn’t so much about preventing it, but how do they surveil it? Do they have an arrangement with other (globally or nationally regulated) exchanges (that would enable them to) surveil what’s going on?”.
He also believes that the agency thinks that the market isn’t mature enough. Consider Bitcoin futures were only launched in major exchanges in the US last December. Kelly thinks that the more the futures market evolve, the more likely that we are going to have an ETF to get approved by 2019.
However, he mentioned that the statistics show that the futures market is rapidly evolving and he believes that this can give a crypto-related ETF a “much better shot” by 2019. He said that: “Here’s CME Futures open interest of large holders. [As of] April, you’re starting to see a big increase… about an 85 percent growth rate. If you extrapolate that out, by February 2019, you’re going to have a very robust market here”.
Intercontinental Exchange and Bakkt
It was also reported that Intercontinental Exchange is partnering up with Microsoft and Starbucks to launch a global regulated digital asset ecosystem. Bakkt is looking to attract not only the institutional investors but also consumers. If you ask Kelly, he thinks that this move by Intercontinental Exchange will help boost the crypto spot and derivatives markets. And also, this will surely be part of SEC’s consideration.
You also have the likes of SEC Commissioner Hester Peirce who is arguing in behalf of the crypto market. This is a breath of fresh air considering that all her peers voted against having a Bitcoin-related ETF. According to Kelly, this is a bullish sign. This suggests that we are “incrementally closer” to having an ETF approved.
Could we be seeing another bull-run in case there really is a Bitcoin ETF by next year? Bitcoin price fluctuated wildly mainly because of news surrounding ETFs. But it seems that it is quite hard to have an ETF approved. Consider the case of a gold-backed ETF, for instance. It was only in 2003 when the US SEC decided to have a gold-backed ETF.
