Bitcoin prices have been on a wild ride recently. From a high of $65,000 two weeks ago to a low of $47,000 on Monday to $55,000 currently, volatility has been the name of the game for the world’s most popular cryptocurrency.
Yet big moves notwithstanding, the trend for bitcoin has been firmly up. Prices are higher by 90% year-to-date, and a whopping 614% over the past year.
Holding bitcoin has been an enriching experience for thousands of investors; unfortunately, not everyone has had easy access to the digital currency. While almost any U.S. investor can go out and open a Coinbase account to trade bitcoin, not everyone is comfortable doing so. Others may be restricted to buying and selling securities in their traditional brokerage accounts for various reasons.
That’s where a bitcoin ETF would come in handy. Unfortunately, no such bitcoin ETF exists in the U.S. Could that change?
Saga Started 8 Years Ago
It’s been eight years since Cameron and Tyler Winklevoss submitted the first filing for a bitcoin ETF, the Winklevoss Bitcoin Trust. But the proposed fund was twice rejected by the Securities and Exchange Commission amid concerns about the risky nature of the nascent cryptocurrency market.
The ETF, which would have traded under the ticker symbol “COIN” (now claimed by crypto platform Coinbase), may be history, but the dream of a U.S.-listed bitcoin ETF never died.
For, in all those years since the Winklevoss filing, investors have been hoping for and anticipating a bitcoin ETF. There is still no guarantee one will actually get approved, but expectations for a successful launch have arguably never been higher.
Why The Time Is Right
There are a few reasons for that. One, the cryptocurrency ecosystem has matured a lot in the past few years. As of this writing, bitcoin has a market capitalization of more than $1.1 trillion; bitcoin futures have traded on the CME for over three years; and many reputable platforms, like PayPal and Fidelity, offer bitcoin trading and/or custody services.
Two, there have been a number of successful bitcoin ETF launches around the world—including Canada—suggesting that regulators may be coming around to the idea that cryptocurrencies are an investable asset class.
Third—and perhaps most importantly as it relates to a U.S.-listed bitcoin ETF—Gary Gensler, the new SEC chairman, is seemingly much more supportive of cryptocurrencies than his predecessor. Up until his nomination to be SEC chairman, Gensler taught classes on blockchain and cryptocurrencies at MIT.
Additionally, in 2019, he wrote that he was “intrigued by Satoshi’s innovation’s potential to spur change—either directly or indirectly as a catalyst.”
While that might not be an outright endorsement of bitcoin, it’s an open-mindedness that many believe will spur Gensler’s SEC to finally give the green light to a bitcoin ETF.
First To Launch
If that happens, the commission will have plenty of products to choose from. There are currently eight active bitcoin ETF filings in the pipeline.
Any one of those products could potentially be the first to market, or as some have speculated, multiple products could be approved at the same time. There is also the multibillion-dollar Grayscale Bitcoin Trust (GBTC) waiting in the wings, a quasi-closed-end fund, whose issuer says it will convert to an ETF once it is allowed to do so.
See the table below for the current list of bitcoin ETF filings, which will be updated as new products enter the pipeline:
|Fund||Issuer||Filing Date||SEC Filing|
|Galaxy Bitcoin ETF||Galaxy Digital Capital Management||04/12/2021||Link|
|Kryptoin Bitcoin ETF Trust||Kryptoin Investment Advisors||04/9/2021||Link|
|Wise Origin Bitcoin Trust||FD Funds Management||03/24/2021||Link|
|First Trust SkyBridge Bitcoin ETF Trust||First Trust Advisors||03/19/2021||Link|
|WisdomTree Bitcoin Trust||WisdomTree Digital Commodity Services||03/11/2021||Link|
|NYDIG Bitcoin ETF||NYDIG Asset Management||02/16/2021||Link|
|Valkyrie Bitcoin Fund||Valkyrie Digital Assets||01/22/2021||Link|
|VanEck Bitcoin Trust||VanEck Digital Assets||12/30/2020||Link|