Tom Lydon: A Bitcoin ETF Has a Good Chance in 2020
In a recent interview, Lydon explained that there are many things happening in 2020 that could potentially lead to the birth of a bitcoin ETF. For one thing, the Securities and Exchange Commission (SEC) has recently approved a new bitcoin fund via the NYDIG Bitcoin Strategy Fund. He explains:
What it [does] is basically approve that it’s filed as publicly traded, so you can, like a regular mutual fund, like the Magellan Fund, there’s a sister mutual fund out there where you can invest in bitcoin. However, it’s limited to only $25 million at this point.
The number may be relatively smaller than what enthusiasts were expecting, though it can be said that this is a positive step forward considering agencies and organizations like the SEC have largely been skeptical – and even hostile – when it comes to such projects.
In addition, CME has begun to offer bitcoin options for the first time in the history of the space. What’s important is that these options ultimately settle in bitcoin rather than cash, as many investors are used to. The SEC has stated in the past that offering further bitcoin-based options and futures could potentially boost safety protocols within the crypto space.
The more we can get on account statements like your Schwab account, like your TD [Ameritrade] account – that’s going to help things out.
The idea is to make crypto offerings more mainstream. Right now, a lagging institutional presence appears to be one of the crypto industry’s biggest problems. Without institutional players taking time to invest in digital assets, the industry cannot attain legitimate status. The more standard monetary firms like those mentioned by Lydon open doorways for investors to take advantage of crypto assets, the more exposure there is to be had.
The Chances Are Smaller, According to Some
Not everyone stands with Lydon’s prediction, however. Bob Pisani of CNBC recently argued that a bitcoin-based ETF only has about a ten percent chance of becoming a reality this year. He comments:
They still haven’t figured out that – remember, you’re not dealing with the CFTC, here. This is not futures, different people. The SEC is terrified grandma is going to buy a bitcoin ETF that is going to collapse, and five years later, all the people running the SEC are going to get hauled in front of Congress and get [asked], ‘Are you the guys who approved grandma buying the bitcoin ETF?’
Lydon, however, believes that bitcoin would be in tip-top shape granted it can be added to registered brokerage statements, which would allow regulators to track crypto and bitcoin-related activity with greater ease.