Regulatory uncertainty could be the cause for yet more delays in the approval of long-awaited Bitcoin exchange-traded products.
Crypto asset investors may have a longer wait for a Bitcoin futures exchange-traded product according to Todd Rosenbluth, the senior director of ETF and mutual fund research at research firm CFRA.
Speaking on CNBC’s “ETF Edge” on Oct. 12, Rosenbluth stated that while a Bitcoin futures product is likely to be the first crypto ETF to gain approval, he cautioned that the current clouded regulatory situation could cause further delays.
There are more than 20 crypto asset-based exchange-traded products waiting for Securities and Exchange Commission approval, and the regulator is yet to pass any, instead kicking the can down the road on multiple occasions.
The researcher suggested that regulators could be waiting for all of these products to meet their goals so that they can be approved at the same time to avoid a “first-mover advantage,” before adding:
“It’s possible — in fact, we think it’s likely — that we’re going to see a delay of a Bitcoin futures ETF until 2022, until the regulatory environment is more clear.”
Van Eck Associates CEO, Jan van Eck, commented that the primary concern for the SEC is the discrepancy between actual Bitcoin prices and the price of the futures contract, in addition to the potential of funds getting too large.
When there is a Bitcoin rally, futures strategies can underperform by as much as 20% a year, he stated before adding “the SEC wants to have some visibility into the underlying Bitcoin markets.”
Van Eck also suggested that the regulator needs to gain more control over crypto trading which it appears to be attempting with its recent threats against Coinbase and the exchange’s stablecoin lending product. Other popular trading platforms such as Robinhood are already regulated and registered as broker-dealers.