There is no denying that institutional investors getting involved in the crypto market could change a lot of things. It can involve a serious amount of money that can potentially bring Bitcoin back closer to its all-time high or even surpass the near $20K record last year.
And for this reason, many are anticipating a crypto-related ETF. However, keep in mind that it isn’t quite simple. Consider the case of a gold-backed ETF. Though a gold-backed ETF skyrocketed the value of gold, it was only approved in the early 2000s. Could this means that we have to wait a bit longer before we get to see a crypto-related ETF?
The crypto community is waiting for yet another possible exchange-traded fund approval this week. If things go according to plan, this will be the very first SEC approved Bitcoin-ETF. And for a lot of optimists, this could potentially bring institutional investors into the picture.
ProShares Bitcoin ETF
ProShares, a company that manages around $30 billion in assets, filed for two Bitcoin ETFs in September. The ETFs are planned to track Bitcoin futures contracts that are traded on the Chicago Board of Options Exchange and it is going to trade on NYSE Acra.
Hunter Horsley, the CEO of Bitwise Asset Management, mentioned that “An SEC filing hitting a deadline is a procedural reality—it doesn’t change the odds of it getting approved, it just draws our attention to it”. He added that “Just because we hit the deadline doesn’t necessarily give any indication that the SEC has changed its tune”.
This summer, Bitcoin’s price jumped to $8,000 territory with rumors of an ETF. It was the VanEck Bitcoin proposal that made the price of Bitcoin jump to $8,500. However, after the agency announced that it is going to postpone its decision, BItcoin price dropped to even $5,700.
If you ask Brian Kelly, the CEO and founder of BKCM, he thinks that “My view is still [that] this does not get approved tomorrow, but I feel we’re making large steps and getting closer to it”.
Why Exactly is ProShares ETF More Appealing?
There were already a good number of Bitcoin ETF applications. In fact, the Cameron and Tyler Winklevoss already submitted twice and both got rejected. But what makes ProShares ETF a bit different is the fact that it is based on futures trading. Though the US SEC rejected the Winklevoss application citing the possibility of price manipulation ultimately because of the lack of regulations on crypto exchanges, futures trade, on the other hand, are traded on the SEC-regulated CBOE.
After rejecting the Winklevoss’ Bitcoin application, the agency reiterated that it is serious regarding the prevention of manipulative acts in the market. And also, there was SEC Commissioner Hester M. Peirce who has a different opinion regarding the Winklevoss ETF. She even published an open letter that was seen by others as a sign that there is a possibility of a future Bitcoin ETF on the horizon.
Could this be the very first Bitcoin ETF? In case this happens, it can easily attract institutional investors. In this scenario, it is possible that Bitcoin is going to get closer to its all-time high.
