The United States Securities and Exchange Commission (SEC) has put out a report from Bitwise detailing why the world is ready for the first Bitcoin exchange-traded fund (ETF).
This, paired with Bakkt getting ready to launch its Bitcoin futures platform next week, cryptocurrency enthusiasts are ready now more than ever for the asset to make its way to the mainstream. However, while Bitcoin futures are finally becoming a real, tangible thing, this ETF presentation is only a plea, at least for now.
A World of Bitcoin ETFs
Bitcoin ETFs could be huge for the market for a variety of reasons, the biggest being that it serves as a safer way for institutional investors to put money into the asset. After all, investing in an ETF means you’re not directly buying Bitcoin, but rather paying for a fund that’s equivalent to the asset’s current value. This way, there’s no excuse for these investors to say that buying into cryptocurrencies is too risky.
Of course, the SEC has to approve Bitcoin ETFs for them to ever become a thing. The SEC posted Bitwise’s presentation as one of many responses to the startup asking about the approval of its fund.
In the presentation, Matt Hougan, the global head of research at Bitwise, notes that the “Bitcoin market of today” has changed quite a bit over the past few years. The SEC’s acceptance of Bakkt’s futures is one example of that. Hougan also uses Fidelity and Jane Street as examples of spaces where “regulated, institutional custodians provide world-class service” and insurance.
The presentation then goes into three main reasons as to why Bitwise thinks their futures should be approved:
- Bitcoin price deviation is much more stable since the big blowup in late 2017.
- Institutional custody now exists, with platforms such as Bakkt, Gemini, and Coinbase offering services.
- Bitcoin futures at groups like CME or Cboe are a sign of market maturity.
A New Future for Bitcoin
Should the SEC approve the Bitwise proposal, one in which they must make a decision on by October 14, the Bitcoin ETFs will list on the New York Stock Exchange, making them perfectly viable for institutional and traditional investors alike.
However, one should note that the SEC’s posting of this document doesn’t translate to an approval. They have been sharing information related to Bitwise’s proposal for some time now. But, one can hope.