Bitcoin ETFs have been hot topics over the years. Many speculated that such an asset would help to introduce more traditional investors to Bitcoin. More attempts have been made to get Bitcoin ETFs to market as of late, and they are now more likely to happen than ever.
- Recent proposals for Bitcoin ETFs have been made by VanEck, Valkyrie, NYDIG and Fidelity.
- Attempts for Bitcoin ETFs have been made since Cameron and Tyler Winklevoss made a proposal in 2013 that was later rejected by the SEC.
- The SEC acknowledged VanEck’s ETF proposal on March 15, giving the regulatory body until April 29 to approve, reject or extend its decision. The SEC then decided to extend its decision another 45 days.
- A Bitcoin ETF could provide more traditional investors a way to invest in Bitcoin that they are accustomed to, potentially bringing more interest to the digital currency space as a whole.
Who Has Applied For a Bitcoin ETF?
Bitcoin ETF proposals have been going on since as early as 2013, though none have been approved thus far in the United States. The only Bitcoin ETFs that exist are listed on the Toronto Stock Exchange (TSX). Over time, companies that have attempted Bitcoin ETF proposals in the US include VanEck, SolidX, Grayscale, ProShares, Direxion, GraniteShares, Bitwise, Wilshire Phoenix and Realty Shares ETF Trusts, all of which have been rejected by the SEC.
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More recently, a number of companies have filed applications to make Bitcoin ETFs. In December, the ETF and mutual fund manager, VanEck, re-filed its ETF application that the SEC actually acknowledged. The SEC’s acknowledgment of the filing means they have 45 days to respond. The SEC has until April 29 to approve, reject, or extend its decision on the VanEck Bitcoin ETF.
In January of 2021, Valkyrie, the operator of the Valkyrie Bitcoin Trust (BTCV) filed an application with the SEC to list a Bitcoin ETF on the New York Stock Exchange. Later in February, NYDIG, the Bitcoin subsidiary of Stone Ridge Assert Management, also filed for a Bitcoin ETF. Finally, in March 2021, FD Funds Management, a subsidiary of Fidelity Investments, submitted a filing for a Bitcoin ETF called Wise Origin Bitcoin Trust, that will track Bitcoin through Fidelity’s Bitcoin Index.
When Will a Bitcoin ETF Come Out?
It is not yet clear when a Bitcoin ETF will emerge onto the markets. The SEC was supposed to come to a decision on VanEck’s filing by April 29, but the regulatory body extended its deadline by another 45 days.
In a CNBC interview in early April Todd Rosenbluth, the head of ETF and mutual fund research at CFRA Research, said “We’ve got a number of firms that have either gone through the filing process or have previously filed but are waiting for more clarity."
“The SEC is less likely to try to pick a winner, we think, as to who comes first and we’re more likely to see them -- If they do approve any ETF — to approve multiple bitcoin-related ETFs. We’ve got a number of firms that have entered and we think we’re likely to see one in the coming year or two, but we don’t have a firm time frame as to when the answer would be yes,” he added.
So, while it seems inevitable that a Bitcoin ETF is on the way, the timeframe it could take for approval seems vague.
After the SEC's extension, J. Matthew DeLesDernier, the assistant secretary at the SEC, said the group found it appropriate to take more time to take everything into consideration.
“The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the comments received,” said DeLesDernier.
What Does a Bitcoin ETF Mean For Crypto?
Some have made the argument that Bitcoin ETFs are not necessary as investors can simply buy Bitcoin to gain exposure to the asset's price action. While this is true, It doesn't take into account the more traditional investors or perhaps less tech-savvy demographic that may still want exposure to Bitcoin.
A Bitcoin ETF gives this type of demographic the ability to gain exposure to the price movements of Bitcoin without going through the learning experience of Bitcoin wallets, seed phrases and public vs. private keys.
The Gemini Exchanges 2021 State of UK Crypto Report found that 27.5% of the people in the age group between 18-24 years old were invested in cryptocurrency. On the other end of the spectrum, just 7.4% of those that are 55 and older were crypto investors.
When breaking down investors based on their career paths, the study found that, of the top 10 sectors, those in IT and telecom industries were the most likely to invest, followed closely by those in architecture and engineering industries. This trend may suggest a correlation with the level of crypto investment and how tech savvy the investor is.
A Bitcoin ETF available on large stock exchanges may be able to lower the barrier to entry and could allow broader demographics of investors to become involved. In doing so it would invite more money into Bitcoin's ecosystem and help to even further secure Bitcoin's place as a standard investment asset.