CFRA analyst Todd Rosenbluth believes a Bitcoin futures ETF will likely be approved in the US but regulatory uncertainty could be the cause for yet more delays in the process.
According to Todd Rosenbluth, senior director of ETF and mutual fund research at CFRA, crypto-asset investors may have to wait longer for a Bitcoin futures exchange-traded vehicle.
While a Bitcoin futures product is likely to be the first crypto ETF to obtain clearance, Rosenbluth warned on CNBC’s “ETF Edge” on Oct. 12 that the present muddled regulatory scenario might create more delays.
The Securities and Exchange Commission has failed to approve any of the more than 20 crypto asset-based exchange-traded products that have been submitted, instead of kicking the can down the road on many occasions.
To avoid a “first-mover advantage,” the researcher speculated that authorities might be waiting for all of these items to satisfy their objectives before approving them all at the same time.
“It’s possible — in fact, we think it’s likely — that we’re going to see a delay of a Bitcoin futures ETF until 2022, until the regulatory environment is more clear.”
The SEC’s biggest issue, according to Van Eck Associates CEO Jan van Eck, is the disparity between actual Bitcoin values and the price of the futures contract, as well as the risk of funds being too large.
Futures strategies can underperform by as much as 20% a year during a Bitcoin rise, he said, before adding, “the SEC wants some visibility into the underlying Bitcoin markets.”
Van Eck also argued that the regulator needs to establish more control over cryptocurrency trading, which it looks to be doing with its recent warnings against Coinbase and its stablecoin loan scheme. Robinhood and other popular trading platforms are already regulated and licensed as broker-dealers.
Analysts have stated that huge investors may be buying BTC in expectation of an ETF clearance this month, thus any talk about a possible delay could hurt the Bitcoin price.
The asset has gained 37.5 percent in the last two weeks, reaching a local high of $58,000 on Oct. 12, but more regulatory dithering might derail the present rally.
Eric Balchunas, a senior ETF analyst at Bloomberg, believes there is still a 75 percent probability that an ETF will be approved this month.
The SEC gave four BTC ETFs — the Global X Bitcoin Trust, Valkyrie XBTO Bitcoin Futures Fund, WisdomTree Bitcoin Trust, and Kryptoin Bitcoin ETF — a 45-day extension earlier this month.
The SEC set a decision date of Nov. 14 for Van Eck’s physically-backed Bitcoin ETF, which was delayed for the second time this year in September.