Could 2021 finally bring a bitcoin exchange-traded fund (ETF) to life?
Is a Bitcoin ETF Heading Our Way?
For as long as bitcoin has existed, traders have been waiting with bated breath for a bitcoin ETF. This, in their minds, would bring the asset fully into mainstream territory, but unfortunately, its volatility has long gotten in the way and prevented the currency from attaining the attention it deserves. Several companies have tried and failed to establish a bitcoin ETF for traders to enjoy, but according to one analyst, that could be about to change.
The Securities and Exchange Commission (SEC) has seen a change in management in recent days. For example, Gary Gensler – the former head of the Commodity Futures Trading Commission (CFTC) – is now being considered to head the organization, and Jeff Kilburg – founder and CEO of KKM Financial – says there are presently around ten separate companies that have filed applications for the establishment of a bitcoin or crypto-based ETF.
The financial agency’s latest managers may be far more open minded when it comes to the release of such a product. Kilburg jokes:
It’s a similar approach to the way I strategically asked my wife to marry me. Around the 15th or 20th time I asked, she finally said yes.
Up to this point in time, the Securities and Exchange Commission has offered the argument that bitcoin’s price isn’t stable enough for an ETF. In addition, the agency has also shed light on the many security and fraud concerns that surround the world’s number one digital currency by market cap.
However, the currency has skyrocketed in price over the past several months. At the time of writing, the asset is trading for more than $48,000 per unit, and organizations such as the CME Group in Chicago are now getting ready to launch Ethereum futures. Kilburg says the digital asset space is gaining traction when it comes to legitimacy, and this is likely to grease the wheels with the SEC. He says:
I think this is all coming together here in 2021. If they can offer a solution via an ETF, regulate it and it can trade more accurately to the actual spot price of bitcoin, that’s the win-win solution for all active and passive investors, even the hodlers.
It May Not Arrive Right Away
But while Kilburg appears certain that we’ve reached the age of the bitcoin ETF, others aren’t so sure. Dave Nadig of ETF Trends commented that this year may not present all the answers traders seek, and he believes such a product may come a bit later down the line. He states:
I’m maybe not quite as Pollyanna about it. I think maybe we’re still looking at ’22, but I do think it’s inevitable, and I think we’re starting to make that progress towards a sort of fully liquid, fully exchange-traded crypto vehicle of some sort.