To date, Bitcoin’s drive to force the SEC into allowing a Bitcoin ETF has been unfruitful and unsuccessful for all parties who have approached the regulator. Since 2016, there have been numerous applications, all of which have been turned away with one even being turned away this month.
However, the general feeling is that a Bitocin ETF is not an impossibility, it is perhaps just not time for one yet. The sentiment form the SEC is that the market needs more time to mature, and there needs to be better structures in place to ensure the market is not manipulated — the primary concern for the SEC.
However, because a Bitcoin ETF would be a tool aimed at attracting traditional investors and people wanting to enter the market who have not before, the demand for such a product needs to be bigger from that sector to push the SEC into some further action.
This is the thoughts of a number of investment firm executives who have debated what it will take for the SEC to launch a Bitcoin ETF on CNBC. However, the timeline to this level of launch is quite varied and unknown, and the feeling is a Central Bank Digital Currency will be seen before a Bitcoin ETF.
A retail push
As it stands, there has been interest in the Bitcoin space from individual investors, and there has been growing interest from the institutional space. However, the retail demand for Bitcoin and Bitcoin products is still relatively low.
Chris Hempstead, the director of institutional business development at ETF and hedge fund provider IndexIQ, predicts that a Bitcoin ETF will come as retail demand for the product grows.
“I doubt very heavily that it’s going to be the last straw,” Hempstead stated. “I think everyone will continue to listen to the feedback and the notes from the SEC, what their comments are, and they will continue to address it.”
But with that Hempstead does not predict “any significant changes to the SEC’s decision in the near future.”
“At some point, when market demand and investor demand pushes the pendulum to a certain area, they will probably take another look at it and have different kinds of considerations.”
Nick Colas, the co-founder of investment analysis firm DataTrek Research, on the other hand, believes that there will be other advancements first before a Bitcoin ETF is considered.
“You will see a central bank cryptocurrency before you will see a Bitcoin ETF,” he stated.