Another year, another filing.
A bitcoin-based exchange-traded fund could see the light of day in 2021 after a changing of the guard at the Securities and Exchange Commission and some promising developments in the corporate arena, Jeff Kilburg, founder and CEO of KKM Financial and a partner at Valkyrie, told CNBC on Monday.
At least 10 firms have filed and failed to gain approval for the long-awaited product, with the SEC frequently citing security concerns and the market’s immaturity as reasons for its denials.
“It’s a similar approach to the way I strategically asked my wife to marry me. Around the 15th or 20th time I asked, she finally said yes,” Kilburg told CNBC’s “ETF Edge.”
With bitcoin soaring to record highs on newfound interest from Tesla and other major companies and the CME Group launching ethereum futures this week, the cryptocurrency space is getting the validation the SEC needs to see, Kilburg said.
“I think this is all coming together here in 2021,” he said, calling the CME’s move a “huge win” for the bitcoin ETF’s chances. Valkyrie, where Kilburg is a partner, filed for its own version of the product in late January.
“If they can offer a solution via an ETF, regulate it and it can trade more accurately to the actual spot price of bitcoin, that’s the win-win solution for all active and passive investors, even the ‘hodlers,'” Kilburg said.
That solution could be close as ever with Gary Gensler, former head of the Commodity Futures Trading Commission, being tapped to lead the SEC and the cryptocurrency market gaining legitimacy, ETF Trends’ Dave Nadig said in the same “ETF Edge” interview.
“I’m maybe not quite as Pollyanna about it. I think maybe we’re still looking at ’22. But I do think it’s inevitable, and I think we’re starting to make that progress towards a sort of fully liquid, fully exchange-traded crypto vehicle of some sort, whether it shows up in a traditional ETF or not,” Nadig said.
Nadig, ETF Trends’ chief investment officer and director of research, cited the success of over-the-counter stocks backed by large amounts of bitcoin such as the Bitwise 10 Crypto Index Fund and Grayscale Bitcoin Trust.
“I think that that is really going to force the SEC’s hand,” he said. “When we have companies like Tesla making bitcoin a major balance-sheet asset and we have companies for whom that is their whole balance-sheet asset trading on the pink sheets, I think it’s going to get hard for them to say no for very much longer.”