Bitcoin ETFs have been rumored for quite some time now. Due to the regulatory red tape, none of these products has been officially approved. However, John Hyland indicates a Bitcoin ETF is only a matter of time.
The Lack of Cryptocurrency ETFs
For quite some time now, there has been a growing demand for cryptocurrency ETFs. An exchange-traded fund attracts institutional investors, which can introduce a lot of money to the cryptocurrency industry. Prior to launching such an ETF, the company providing access to this service needs to obtain regulatory approval. That is a lot easier said than done, mainly because of Bitcoin’s unregulated nature, first and foremost.
Various attempts have been launched to introduce Bitcoin ETFs to the masses. None of them received SEC approval, for rather obvious reasons. More specifically, the SEC has made it clear they do not see merit in Bitcoin ETFs at this time. This is mainly due to the volatile nature of this industry as well as the lack of effective regulation. Even so, things seem to be heading in the right direction.
According to Bitwise Asset Management’s John Hyland, such an investment vehicle will come to market soon. It is a rather optimistic outlook, especially given how negative the SEC has been regarding such products.
Changes May Be Imminent
Despite these obstacles, Hyland seems convinced the situation is evolving according to plan. In a recent interview, he commented as to how a Bitcoin ETF is closer than people may realize. Several key reasons were identified in this regard. Enhanced regulated trading, custody, and third-party pricing are all evolving in a positive manner, according to Hyland.
In terms of getting a cryptocurrency ETF approved, no real timeline can be provided at this stage. Hyland confirms there will not be any immediate action. However, it seems 2019 can become a very promising year in terms of cryptocurrency and institutional investors.
Hyland discusses the choice between physical versus futures Bitcoin ETFs. He says:
From that standpoint, physical probably makes sense. It’s a deeper, more liquid market. You don’t have to deal with buying the futures and rolling them. You don’t have to deal with backwardation and contango. Those issues go away, and those costs go away.
For the time being, it seems the current status quo will remain in place. That is not necessarily a bad thing, albeit it’s somewhat disappointing. Taking cryptocurrency mainstream will require proper regulation and accessible investment vehicles. An ETF still seems the go-to solution in this regard, although there may be other options as well. Regardless of the outcome, the cryptocurrency industry will continue to evolve.
When do you think Bitcoin ETFs will eventually see the light of day in the United States? Let us know in the comments below.
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