Will this be the year of the first Bitcoin ETF in the United States?
Bitcoin’s performance this year has attracted mainstream media interest, but regulatory hurdles have been an issue the cryptocurrency market has faced for years. The Securities and Exchange Commission [SEC] of the United States has a long history of rejections when it comes to Bitcoin Exchange Traded Funds [ETFs].
Market enthusiasts believe that 2021 may be the year when we can finally see a Bitcoin ETF being approved by the U.S. SEC. Lyn Alden, macroeconomist and founder of the Lyn Alden Investment Strategy, was asked how and what the SEC would choose.
Alden noted in an interview with Peter McCormack:
“I assume that one [ETF] it’s coming and I admit I don’t know how it works when everyone wants one. I don’t know how they [SEC] choose who will have one. ”
Comparing the situation with the nearest asset class, such as gold, Alden noted that the original gold ETFs were extremely liquid, so investors who chose the original company to trade options ended up paying a higher rate. However, with more gold ETFs on the market, there were competitive prices, but the other companies may not be as liquid.
“You can see that, to some extent, in the Bitcoin space you have multiple ETFs, since you are allowed to use that asset class as an ETF.”
There have been an increasing number of companies filing orders for Bitcoin ETFs, including investment firm Fidelity. Its subsidiary, FD Funds Management recently submitted an S-1 file to the SEC outlining its intention to financially support the ETF. However, prior to Fidelity, there were more than ten registrations with the SEC for the same and included companies like Valkyrie and New York Digital Investment Group LLC [NYDIG].
According to Alden, it is time for the SEC to approve Bitcoin ETF and the reasons they had previously stated about Bitcoin being “very volatile” may not work this time, taking into account the current state of the stock market.