Experts disagree on Bitcoin ETF’s 2021 outlook as deadline approaches

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Receiving “no news is good news” for the approval of a bitcoin-backed exchange-traded fund (ETF), according to Bloomberg ETF analyst. However, others are more pessimistic, believing that the United States Securities Commission (SEC) is likely to delay approval of a bitcoin ETF until 2022.

Speaking on CNBC Monday, Todd Rosenbluth, senior director of ETF and mutual fund research at the investment research firm CFRA, said hopeful investors may still have to wait some time before a bitcoin ETF is approved, even if the ETF is backed by futures rather than ‘physical’ bitcoins .

“It is possible – in fact, we think it is likely – that we will see a delay of a bitcoin futures ETF until 2022, until the regulatory environment is clearer,” said Rosenbluth in the video interview.

The ETF researcher went on to say that a potential approval comes down to “a timing issue”, explaining that if decisions on ETF proposals are postponed until 2022, all products “can be launched in same time instead of [one] get the first-come-first benefit.

In the same interview, the ETF issuer Van Eck Partners CEO Jan van Eck also noted that the main concern of the SEC is that gaps will occur between spot prices and futures prices for bitcoin.

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

Van Eck Associates is one of the companies that has filed proposals with the SEC for bitcoin ETFs backed by physical media and futures. According to a Bloomberg snapshot of pending ETF applications, October 18 is the potential decision date for Van Eck’s futures-backed ETF.

Source: Bloomberg

According to Eric Balchunas, Bloomberg’s own ETF analyst, however, “no news is good news” regarding a bitcoin ETF, although he said it was an “unusual situation. “.

Writing on Twitter on Tuesday, Balchunas noted that the SEC has only a few days left to decide whether it wants to further delay a bitcoin futures ETF. “Yes [we] hear nothing, the first ETF deposited (ProShares) will be free to launch on October 18.

Still, the analyst warned the crypto community that it could overestimate the demand for such an ETF, saying Bloomberg only expects around $ 4 billion in demand in the first 12 months for the fund traded in. stock Exchange. The figure represents just 1% of bitcoin’s market cap and 3% of all bitcoin futures contracts currently traded, according to Balchunas.

Additionally, the analyst also reiterated something the crypto community already knows, namely that a physically backed bitcoin ETF would be the preferred option. Judging from the experience of Canadian ETFs, this also seems to be the general consensus among investors, with much more capital flowing into ETFs backed by real bitcoins than those backed by ‘paper bitcoins’ in the form of contracts. in the long term.

On a related note, Urik K. Lykke, founder of the digital asset hedge fund ARK36 Recount in a comment that expectations for institutional-type investment vehicles “have often resulted in a” buy the rumor, sell the news “scenario for bitcoin.

“Rarely does the actual product meet the hopes of facilitating the institutional adoption of digital assets. For example, the real impact on the market of the highly anticipated CMF launch in 2017 or Cooked in 2019 turned out to be rather disappointing, ”Lykke recalled, while adding:

“A bitcoin ETF will have a net positive effect on the development of the space, but it is unlikely to lead to an immediate and dramatic increase in institutional adoption of digital assets.”


Learn more:

– SEC approves Bitcoin linked ETF as market waits for ‘real’ BTC ETF
– Bitcoin ETF ‘bad guy’ heads for US approval as futures offers are made

Not ideal, but “better than nothing” – The market is waiting for the “Paper Bitcoin” ETF
– Opinions are divided on US Bitcoin ETF as experts say 2021 launch is possible

– “One more year off” non-futures Bitcoin ETF approved
– SEC relaunches Bitcoin ETF on the road

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