Bitcoin ETF hopefuls likely have a little longer to wait.
The first exchange-traded fund based on the flagship cryptocurrency may not see approval for another two years despite what many saw as a favorable changing of the guard at the Securities and Exchange Commission, Osprey Funds founder and CEO Greg King told CNBC on Monday.
New SEC Chair Gary Gensler may have taught a class on crypto at MIT, but that doesn’t mean a bitcoin-based fund will immediately receive approval, King told CNBC’s “ETF Edge.”
“People are sort of reading into it [like] that means that there’s going to be green lights for a bitcoin ETF. We’re not so sure that’s the case,” said King, who plans to convert Osprey’s Bitcoin Trust (OBTC) to an ETF when the time is right.
“Personally, I think if something happens, it’s more likely in 2022. It’s just really getting going. These things take time,” King said.
The fact remains that the SEC’s main concerns around bitcoin — the potential for fraud, manipulation and custody issues — haven’t gone away, Grayscale Investments CEO Michael Sonnenshein said in the same “ETF Edge” interview.
“The industry continues to mature with each passing day, but clearly, even though we are maturing, we’re still not quite there yet,” said Sonnenshein, whose firm has been working with the SEC on addressing its concerns since 2016.
With regulators so engaged in the process, it appears to only be a matter of time before a bitcoin ETF sees the light of day, Sonnenshein said.
He added that he is “100% committed” to converting his firm’s popular Grayscale Bitcoin Trust (GBTC) to an ETF “when the regulatory environment is ready to have it.”
“The institutions that now invest with us would not have thought about this two, three years ago when regulatory uncertainty may have been a hurdle for them. Nowadays, that’s not the kind of pushback that we get,” Sonnenshein said. “And so, I think as time goes on, you’ll see a maturation … that will give regulators increased comfort with the asset class.”
Disclosure: King and Osprey Funds own bitcoin. Grayscale Investments owns bitcoin.
