Bitcoin futures ETF approval set to be pushed back to 2022: CFRA

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Bitcoin backers might have longer to wait for an exchange-traded fund directly tied to the cryptocurrency or its futures, CFRA Research’s Todd Rosenbluth told CNBC’s “ETF Edge” on Monday.

The price of bitcoin has climbed 35% over the past two weeks as investors have become optimistic about the Securities and Exchange Commission’s plans for the many Bitcoin ETF applications currently under review.

More than a dozen companies are still waiting to see whether their respective Bitcoin-based ETF deposits will advance in the public markets. Others, including VanEck, Invesco, Amplify ETFs, and Global X, have launched tangential products focused on blockchain infrastructure or the broader cryptocurrency economy.

“We think we’re more likely to see a bitcoin futures ETF first,” said Rosenbluth, senior director of ETF and mutual fund research at CFRA.

VanEck, ProShares, Invesco, Valkyrie, and Galaxy Digital have all filed for bitcoin futures ETFs. The first four could be approved, refused or have their decisions delayed by mid-October; The fate of Galaxy Digital will be revealed on November 1.

“It’s all about the timing,” Rosenbluth said. “Is this happening in 2021 or is it happening in 2022 so that all these products that … could meet the targets are actually approved and can be launched at the same time instead of gaining the benefit of the first one? come?”

“It’s possible in fact, we think it’s likely that we’ll see a bitcoin futures ETF lag until 2022, until the regulatory environment is clearer,” he said. -he declares.

The SEC is primarily concerned about the potential spreads between bitcoin prices and futures prices, the risk that funds will grow too large and push the limits on the number of contracts they can hold, and the risk of cross-border investment, said Van Eck Associates CEO Jan. van Eck said in the same interview.

“In bitcoin rallies, bitcoin futures strategies can underperform by up to 20% per year,” van Eck said. “The SEC wants to have some visibility in the underlying bitcoin markets.”

When it comes to regulatory oversight, the SEC already exercises it in several ways when it comes to cryptocurrency trading, van Eck said.

Robinhood, which offers crypto trading, falls under the purview of the SEC because it is registered as a broker, van Eck said. The SEC may also have obtained “de facto regulatory control” over Coinbase, which stopped offering a loan product several weeks ago at the commission’s request, he said.

It could help the bitcoin futures ETF’s odds, but it’s unclear to what extent, the CEO said.

“They clearly have some control over the players in the underlying bitcoin markets, so maybe that increases the odds to zero, but I have no idea what they are,” he said. declared.

In addition to the October 25 approval deadline for VanEck’s Bitcoin Futures ETF filing, the SEC has a November 14 deadline to approve or reject VanEck’s proposal for an ETF based on the. physical bitcoin.

Disclosure: Invesco is the sponsor of CNBC’s “ETF Edge”.

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