Reggie Browne, known to be the godfather of Exchange Traded Funds (ETF) commented that Bitcoin (BTC) ETF’s will unlikely happen anytime soon. According to him, BTC ETF will be approved when a robust regulatory framework is developed for the Bitcoin industry.
Reggie Browne is known to help Knight Capital become one of the largest ETF trading firms in the world. He currently heads the ETF trading department at Cantor Fitzgerald.
“It’s very difficult for the [Securities and Exchange Commission (SEC)] to wrap their heads around a positive approval because there’s no data yet … the markets just aren’t here.”
It’s not only Browne that suggests ETF’s are not possible for a while, but also BlackRock’s CEO, Larry Fink. Fink said BlackRock would hold on to offering Bitcoin ETF’s till the cryptocurrency industry becomes legitimate.
First came Bitcoin Futures in late 2017, and this year it was supposed to be Bitcoin ETF’s. However, BTC ETF’s have not been approved as of yet by the Securities and Exchange Commission (SEC). BTC ETF’s rejected include Winklevoss Twin’s BTC ETF, VanECK’s ETF and ProShares Bitcoin ETF’s. There is hope however for CBOE’s BTC ETF to succeed as it has been postponed till next year.
Reasons tied to the rejection of BTC ETF include manipulation, volatility and lack of trusted custodians. These three main points need to be sorted before the SEC can justify and accept BTC ETF’s.
Manipulation is said to be solved by Nasdaq’s SMART technology which is a market surveillance tool for correcting manipulation in BTC trading.
Volatility has not been an issue in the year 2018, and has been the lowest in the last 2 years. In fact Bitcoin’s stability might give the extra security the SEC will want before agreeing on a BTC ETF.
Trusted custodians such as Fidelity, Goldman Sachs and Coinbase releasing custody solutions for BTC is helpful for BTC ETF’s to be a futuristic possibility.
Image Source – Flickr
Subscribe to our Newsletter to be a part of our future $1,000 per month contests.