Talk surrounding Bitcoin exchange-traded funds (ETF) continued to mount over the past week. Case in point, in an exclusive interview with a preeminent crypto media outlet, a controversial industry commentator, infamous for his appearances on mainstream media, painted a cynical outlook for the advent of exchange-traded, crypto-related financial vehicles.
A Bitcoin ETF May Be A Quixotic Dream
In a candid conversation with CoinTelegraph at Switzerland’s recently Crypto Finance Conference, Brian Kelly, a CNBC contributor who once was enamored with XRP, noted that cryptocurrencies are likely to post gains, citing Bitcoin’s growing use case as a gold alternative.
However, Kelly, who runs a crypto hedge fund that utilizes a long-short strategy, subsequently noted that the likelihood of a Bitcoin ETF making it through extensive regulatory hoops is close-to-zero. The CNBC contributor backed his comment by remarking that much remains “unresolved,” likely referring to the mass of concerns that the U.S. Securities and Exchange Commission has had with crypto markets previously.
He isn’t alone in touting this thought process. Meltem Demirors, the chief strategy officer at Coinshares, the chief strategy officer at crypto asset manager CoinShares, recently noted that the proposal from VanEck, SolidX, and CBOE will “absolutely not” get approved.
Demirors then noted that a regulatory green light is unlikely to bless any other proposals, whether it be from Gemini, Coinbase, or otherwise. She explained that as it stands, the SEC would get no political, financial, or social tailwind from approving a Bitcoin ETF. Instead, Demirors noted that there is solely downside for the financial regulator, especially considering the tumultuous political climate that Americans face today.
The CoinShares C-suite member then explained that many forget that SEC and CFTC incumbents are appointed, and are mandated to stay in line with their party’s mandate. And, with there being nuances regarding America’s stance on fintech and how the nation’s economy should progress, the advent of a properly-backed crypto ETF is that much more quixotic. This has all only been accentuated by the ongoing government shutdown, slated to enter its fourth week on Monday.
In closing, to put a cherry on the proverbial cake, Demirors explained that from a fundamental viewpoint, approval is likely far off, as there remain underlying security and liquidity concerns about the underlying crypto market.
Others Have Been More Optimistic
Although Demirors seemed adamant that such an application will fall through the floor, a number of firms and pundits have only doubled-down on their Bitcoin ETF ventures. Per previous reports from Live Coin Watch, New York-based investment manager Wilshire Phoenix filed a semi-Bitcoin ETF application last week.
Wilshire claimed that its trust would hold positions in not only BTC but short-term U.S. Treasury bills and American dollars as well. The firm claiming that this unique strategy would reduce the volatility of its vehicle, potentially enticing the SEC to give a proper green light.
However, in related news, Japan’s FSA recently shut down rumors that the financial regulator would be approving crypto-backed ETF applications in the near future.