Canaccord, the largest investment firm in Canada, has noted that it is unlikely that a Bitcoin exchange-traded fund (ETF) approval is possible this year.
Canaccord researchers Michael Graham and Scott Such in an official report called “Blockchain and Digital Assets: US Equity Research” noted that:
“And although the VanEck SolidX Bitcoin Trust, seen by many as the most formidable candidate for a potential approval, is due for a potential decision as early as this month, it is largely believed that the SEC will extend its deadline, in which case a decision may not be made until March 2019. Meanwhile, we note that other bitcoin-based securities (e.g., Bitcoin Tracker One) have been available for trading on regulated exchanges as early as May 2015 in Sweden, while north of the border, Canada is working towards its own bitcoin ETF product, the Evolve Bitcoin ETF.”
Generally, the U.S. Securities and Exchange Commission (SEC) has been hesitant in approving ETFs because of nascent assets and commodities. With regards to bitcoin, as noted in the disapproval of the SolidX Bitcoin ETF and the Winklevoss Bitcoin ETF in 2017 and 2018, the SEC likes to keep its decision making discrete until the end.
Observers believe that even though the VanEck-SolidX Bitcoin ETF and the Chicago Board Options Exchange (CBOE) Bitcoin ETF are considered to have a high possibility of approval by the U.S. SEC, the commission will not publicly reveal its decision until the final deadline, February of 2019.
The short-term price movement of BTC and the rest of the crypto market, which greatly depend on the movement of the most dominant cryptocurrency, Bitcoin, could be negatively affected by a delay in an SEC verdict on whether to approve or to reject the VanEck-SolidX and CBOE Bitcoin ETFs.
Canaccord researchers stressed that as a result of the background of VanEck and CBOE in dealing with regulated U.S. markets, their Bitcoin ETFs are expected to be accepted by the SEC. The two ETF have complete insurance, guaranteed secure storage for investors, and most importantly, do not rely on a single crypto exchange for valuation, the drawbacks that resulted to the Winklevoss Bitcoin ETC rejection.
According to the Canaccord researchers, the trusted cryptocurrency custodianship offered by Coinbase, custody solutions created by Ledger and BitGo, and the ETF filing of VanEck have caught the attention of institutional investors in the industry and will keep on increasing the demand for crypto in U.S. markets.
“The arrival of a potential bitcoin ETF remains top of mind for institutional investors seeking exposure to this emerging asset class, and there are now multiple applications pending approval by the SEC, most notably that proposed by Van Eck/SolidX. In addition, institutional custody continues to make progress, as Ledger announced a partnership with Nomura and Global Advisors during the Consensus conference in May and Coinbase launched its institutional custody product in early July,” the Canaccord researchers added.