Several investment firm executives have debated the likelihood of the US Securities and Exchange Commission (SEC) licensing a US-based Bitcoin (BTC) exchange-traded fund (ETF) during a CNBC broadcast on March 7.
The discussion follows the recent rejection by the SEC of its latest pending Bitcoin ETF application.
Wilshire Phoenix first submitted the application for the proposed “United States Bitcoin and Treasury Investment Trust” to the SEC in January 2019.
Despite six changes in 13 months in 13 months, the SEC rejected the Wilshire Phoenix ETF, with concerns about manipulation of the Bitcoin market and limited investor protection.
Chris Hempstead, the director of institutional business development at ETF and hedge fund provider IndexIQ, predicts that a Bitcoin ETF will come as private demand for the product grows.
“I very much doubt that this will be the last straw,” Hempstead said. “I think everyone will continue to listen to the feedback and comments from the SEC, what their comments are, and they will continue to address it.”
Despite predicting that the committee will reconsider its position if it is confronted with broad demand in the coming years, Hempstead does not predict “significant changes to the SEC’s decision in the near future.”
“At some point, when market demand and investor demand push the pendulum to a certain area, they are likely to look at it again and have different types of considerations.”
Nick Colas, the co-founder of the investment analysis company DataTrek Research, expressed skepticism about the prospect that the SEC would soon grant a license for a Bitcoin ETF.
“You see a central bank cryptocurrency before you see a Bitcoin ETF,” he said.
When asked whether stablecoins are “imminent” for consumers, Hempstead replied: “I think you are doing something.”
Hempstead predicts that stable coins and other cryptocurrency products will be regulated as the sector matures and the public gains more insight into the internal functioning of distributed ledger technology (DLT).
“I think part of what they’re waiting for is a bit more structure and overview of the operational complexity of cryptocurrency transactions […] I think that as we see more risk diversification and more understanding about how these different products, not just Bitcoin, how they work – I think that’s probably what is needed at the Commission level. “
According to Dan Wiener, chairman of Adviser Investments and editor-in-chief of The Independent Adviser for Vanguard Investors, the acceptance of blockchain technology by companies is “more important” than cryptocurrency.
Wiener rejected the idea that Bitcoin is completely needed, arguing that payment platforms such as Venmo have attracted much more acceptance than cryptocurrencies.
“Do we really need bitcoin? I’m not a drug dealer. I’m not worried about moving money […] We have many, many ways to move money, I don’t know that we should be able to hide ourselves or our identity. “