Bitcoin exchange-traded funds (ETFs), are challenged by the US Securities and Exchange Commission (SEC), that’s why their approval and mass adoption is still a while away from now. However, there are some outstanding figures that actively support ETFs and bet that their future is certain.
One of these enthusiasts is Ric Edelman, founder of advisory firm Edelman Financial Engines. He is very optimistic about ETFs and believes that eventually, they will meet the demands of the SEC and get the Commission’s approval.
“It’s virtually certain. The only question is when. The SEC has several legitimate thoughtful concerns that the industry has to overcome but I’m confident they will. Eventually, we will see a bitcoin ETF and it’s at that stage that I will be much more comfortable recommending that ordinary investors participate.”
The Securities and Exchange Commission has long had concerns over the cryptocurrency market and its regulation. A number of bitcoin ETF proposals have filed for SEC approval, but none has yet got the green light. In July, the SEC for the second time rejected Cameron and Tyler Winklevoss’ proposal to list a bitcoin ETF on the Bats BZX Exchange.
As they explained, Bitcoin trading lacks a secure chain of custody like other financial markets provides little control for SEC over price manipulation, as it has no governance over overseas trading platforms.
Last August, SEC turned down seven filings from ProShares, Direxion, and GraniteShares. Later, the regulator said it would review the proposals. This decision led to the new queue for the SEC-approved BTC ETF. At the beginning of 2019, Bitwise filed another application after having been rejected by the SEC in 2018.
Edelman backed his opinion by some more examples of financial institutions interested in ETFs. He said:
“We’ve got some serious players. Fidelity has made a major announcement in the custody issue. We’ve got Kingdom Trust and a number of other very serious players on the custody side. I’m confident that in very short order VanEck or Bitwise will satisfy the custody concern to the SEC.”
“Technologically, regulation-wise it could happen tomorrow. There is no particular motivation because the ‘powers that are be’ in the fund industry have no incentive to give up their market share.”
It is interesting that some SEC commissioners also believe that Bitcoin ETFs will ultimately be approved. For example, Robert J. Jackson said:
“Eventually, do I think someone will satisfy the standards that we’ve laid out there? I hope so, yes, and I think so.”
Another ETF proponent is Tom Lydon, editor-in-chief of ETFTrends.com. According to Lydon, there is already a demand for ETFs.
“There is pent-up demand. We interview advisors all the time. Seventy-four percent say they’ve talked to clients about their interests in bitcoin so they need to step up when this happens because that money is going to go elsewhere.”
ETFs function as investment funds and allow everyone to get access to an index or commodity providing the same profit to investors as the major markets do. If approved by SEC, ETFs will definitely facilitate the investing process into cryptos and make the industry more attractive.