Bloomberg analyst ‘bullish’ on US Bitcoin ETF this year
A Bitcoin exchange-traded fund (ETF) in the United States could be in the cards this year.
This is according to Eric Balchunas, ETF analyst at Bloomberg Intelligence, Bloomberg reported Tuesday.
“Institutional adoption of crypto is much greater,” Balchunas said when asked why he thought this year was different from Bitcoin’s last bull run in 2017 and 2018. “You have the intense growth in ‘Default’ crypto products like (Grayscale’s Bitcoin Trust) which are not ideal for retail investors and the SEC (US Securities and Exchange Commission) knows this. “
ETFs work the same way as mutual funds, but can be bought and sold throughout the daily trading period on exchanges like stocks. Grayscale is owned by CoinDesk’s parent company, Digital Currency Group.
Balchunas also highlighted Canada, which approved its first bitcoin ETF in February. At the time, he noted that approval in Canada was a “good sign” that the United States would follow his lead.
So far, Canadian financial regulators have approved four bitcoin ETFs. By comparison, the United States has yet to approve an ETF for any cryptocurrency despite multiple applications spanning several years.
“Canada is still between six months and a year ahead of the United States,” Balchunas said.
Canadian ETFs have done well. Balchunas called investor demand “crazy”. In the first two days of trading of the Purpose Investment ETF, Canada’s premier crypto ETF, the fund raised over $ 420 million in assets under management. The four ETFs generated $ 2.3 billion in assets in just three months, he added.
Balchunas also pointed out that Gary Gensler had been appointed chairman of the SEC. He came to the SEC with a background in fintech and a position presumably in favor of crypto because he was teaching crypto classes at the Massachusetts Institute of Technology.
Still, Balchunas said Gensler may have other priorities, given the Robinhood / GameStop debacle earlier this year, which could delay approval of a bitcoin ETF. (Robinhood, a trading app, froze trading in GameStop’s shares on January 28, a move that caught the attention of regulators, who feared the shutdown would hurt retail investors who typically use the app. )
But, said Balchunas, “The longer they delay, the more effectively they will play the role of kingmaker, for whoever comes out first is instantly rich.” So I think there is a risk of waiting too long, and I think they understand that.
According to Balchunas, there has been a “change” this year, which means his team are “more optimistic about the approval than we have ever been”.