By
Bhushan Akolkar
May 10th, 2024
This year, at least 19 issuers have indicated they are looking to launch any crypto ETF. About 12 of them focus on Bitcoin.
Bloomberg analysts believe that starting this October, we might see the launch of Bitcoin (BTC) futures ETFs as there is a high possibility that the US Securities and Exchange Commission (SEC) will approve them.
Last week, investment firms VanEck and ProShares both withdrew their applications with the SEC for approval of Ethereum (ETH) futures ETFs just two days after filing them. VanEck submitted the filing on Wednesday with the aim to invest in ETH futures contracts, Canada’s already-approved Ethereum ETFs, private Ethereum funds, and exchange-traded products with exposure to ETH. As for ProShares, it was looking for approval for an ETF based on ETH futures called the ProShares Ether Strategy ETF.
According to senior ETF Analyst for Bloomberg Eric Balchunas, such a sudden withdrawal probably resulted from a low chance of getting approval. Eric Balchunas believes that SEC has spoken to both the firms and let them know that they were unlikely to approve an ETF futures fund.
Meanwhile, another Bloomberg ETF analyst James Seyffart believes that the withdrawal is a good sign for Bitcoin futures ETFs. The expert has said that SEC is likely to approve Bitcoin futures ETFs and they may launch as soon as this October. Moreover, the Bitcoin futures ETF that is most likely to get approval is ProShares’ ETF. As soon as it gets approved, it will launch in about 75 days.
So far this year, more than a dozen industry participants have filed applications to launch a BTC ETF. As SEC Chairman Gary Gensler indicated, he himself would prefer Bitcoin ETFs that only trade BTC futures contracts rather than ETH ETFs.
Bitcoin Futures amid Crypto ETFs Rush
After SEC Chairman Gary Gensler said that regulators may be more open to a Bitcoin ETF if it centers around futures rather than the cryptocurrency itself, many fund managers rushed to file for a BTC futures ETF. This year, at least 19 issuers have indicated they are looking to launch any crypto ETF. About 12 of them focus on Bitcoin.
One of the earliest applicants for BTC ETF was VanEck. Its first Bitcoin ETF attempt, the VanEck SolidX Bitcoin Trust, came back in 2018. However, that application was withdrawn in September 2019. In December 2020, VanEck made a second attempt at getting a Bitcoin ETF off the ground, filing its application for the VanEck Bitcoin Trust with the SEC.
Valkyrie Investments is also in the queue for BTC ETF approval from the SEC. The asset manager filed for approval in January 2021.
Other applicants include the New York Digital Investment Group and advisory firm Stone Ridge, WisdomTree, hedge fund SkyBridge Capital, Fidelity Investments, Kryptoin, Galaxy Digital, Ark Invest, Grayscale, One River, and more.
All the applicants are competing in the race, as the one that will get approval first will mark the history. Earlier, Bitcoin ETFs have sprung up around the world, in Canada, Brazil, and Dubai. But to date, the SEC has rejected every Bitcoin ETF application, citing the potential for market manipulation among cryptocurrency traders.