What You Need to Know
- Ultimately the SEC will approve several Bitcoin ETFs, according to a panel of ETF experts at a Coinbase conference.
- A Bitcoin ETF would allow advisors to add guardrails for clients along with ability to rebalance those assets
- It would essentially make Bitcoin a portfolio asset for many more investors.
The Securities and Exchange Commission will approve a Bitcoin ETF but likely not until late this year or early 2022, according to a panel of ETF specialists at the Coinbase Consensus2021 virtual conference.
At least eight Bitcoin ETFs are pending before the SEC, which has rejected all previous filings, and several are already on a time clock for review, which can run as short as 45 days or as long as 240 days. A decision on the first one up for approval in the latest go-round — the VanEck Bitcoin Trust — was delayed until June 17, but the agency could postpone a decision again.
“I still expect the agency will issue further guidance … we’re going to get a round of comments, and requests for refiling again, which will restart the clock … toward the fall,” said Dave Nadig, chief investment officer and director of research at ETF Trends. “I don’t think the dates we have now…is the next ‘we have to hear something.’ Those have-to’s are never really have-to’s; the SEC could delay as long as it wants. They can throw people back to the starting gate at will.”
The SEC could even approve several ETFs at once, instead of one at a time, according Eric Balchunas, a Bloomberg Intelligence ETF analyst who moderated the session, and Nadig.
None of the four ETF specialists on the panel, including Balchunas, doubted the SEC would eventually approve a Bitcoin ETF and all highlighted the benefits of such a product.
The Benefits of a Bitcoin ETF
“We desperately need a crypto ETF,” said Nadig, noting there is danger in not recognizing the value of moving information and money across the divide between the crypto financial market and what he called the “national securitized markets,” which includes traditional financial assets like stocks, bonds and ETFs.
A Bitcoin ETF would provide “convenience with security,” said Nate Geraci, president of the ETF Store, an investment advisory firm specializing in ETFs for retail investors. Investors in a Bitcoin ETF don’t have to worry about losing the key to a private Bitcoin wallet or their crypto exchange getting hacked.