2021-5-11 20:03 |
Bloomberg's top ETF analyst Eric Balchunas sees 2021 has explained why the approval of a bitcoin ETF in the U.S. might be imminent.
There has been a lot of hype over a bitcoin exchange-traded fund (ETF) arriving in the U.S. since at least 2017, with many firms filing for regulatory approval to offer one this year.
Although many filings have been made with the U.S. Securities and Exchange Commission (SEC), the agency has not yet approved one. But Bloomberg's top ETF analyst, Eric Balchunas, recently claimed that 2021 is a unique year for Bitcoin and made the case that an approval of a bitcoin ETF in the U.S. might be imminent.
"[The] institutional adoption of crypto is much greater, the money centers are getting involved," explained Balchunas when asked how 2021 is different from previous years. Retail investors tend to feel less skeptical as institutions like Goldman Sachs get involved in bitcoin, for example, further increasing adoption.
An ETF approval would theoretically facilitate this growing demand to flow into bitcoin, primarily by retail investors. Because, as Balchunas pointed out, although there has been an "intense growth of 'default' crypto products like GBTC,” these offerings are “not ideal for retail investors and the SEC knows this."
Balchunas also brought up how bitcoin ETFs are already a reality in Canada, where "there's been a torrent of launches ... which have worked fine and seen a lot of action." He also explained that "Canada has a history of being ... six months to a year ahead of the U.S.," further indicating that the U.S. will likely have a bitcoin ETF sometime in 2021.
In just three months after launch, Canadian crypto ETFs have taken over the most traded leaderboard in the country's market and have already amounted to $2.3 billion in assets, Balchunas explained. For perspective, the U.S. market is 27 times larger than Canada's.
Finally, Balchunas mentioned how the new SEC chair Gary Gensler might play a decisive role in facilitating the approval of a bitcoin ETF in the United States. Gensler seems to understand bitcoin's distinct characteristics and has previously taught classes on blockchain technology and cryptocurrencies at the Massachusetts Institute of Technology.
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