So, maybe its NOT the regulators. In wondering why a bitcoin ETF (Exchange Traded Fund) won’t pop up on your trading screen any time soon, it seems so easy to just say “damn regulators are holding things up”, BUT those fun killers seek input from a whole lot of folks. Banks, for one, advise the Feds and since they are not all on board with digital currencies just yet THEY can be the fun killers. So, offshore? Probably soon but they may not be available here in the U.S. anyway so its going to be a while. Hey SEC, why not ask Fidelity for input? Their CEO is all in and she even has Fidelity ‘mining’ bitcoin and ethereum.
“Will bitcoin exchange-traded funds (ETFs) ever be accepted by regulators in the US or abroad? That’s a question that’s even more complex than would initially appear, say industry participants.
A better question might be: is it regulators, specifically, that need convincing? After all, the agencies tasked with enforcing existing laws heavily consider input from multiple parties, including banks, many of whom have yet to embrace the still-nascent digital currency.
That was the viewpoint put forward by Ryan Radloff, head of investor relations at XBT Provider, a Sweden-based issuer that’s already succeeded in listing bitcoin exchange-traded notes on a public exchange.
“It’s a bit of a chicken-and-egg problem between the banks and the regulators,” Radloff said.
“You’re not going to see many big banks jumping in until the regulators are comfortable.”
On that point, even within the US, different regulators approach cryptocurrencies like bitcoin very differently. Bitcoin is a form of property to the IRS, a virtual currency to FinCEN and a vehicle for ‘money transmission’ in the eyes of various state regulators.
The SEC has not yet taken an official stance on bitcoin’s classification, but in the meantime, it has rejected two applications for bitcoin-backed exchange-traded funds thus far (the Winklevoss Bitcoin ETF and the SolidX Bitcoin Trust).
The outlook at the moment overall does not look promising, said Chris Burniske, blockchain products lead at ARK Invest, an investment management company that offers ETFs centered around emerging technologies.
“That was a pretty stern, hard line they drew,” Burniske said of the SEC’s most recent ETF rejection. “It’s clear it’s going to take more work to get the SEC to approve something like this.”
“Based on the response so far, it doesn’t look optimistic for a bitcoin product in the US anytime soon in terms of regulatory approval, but this may change.”
However, exchange-traded funds aren’t the only option for public investment…”