Morgan Creek Capital CEO Mark Yusko is confident that in the foreseeable future we will witness the creation of the first Bitcoin ETF with the permission of the US Securities and Exchange Commission (SEC). He stated this in an exclusive interview with the MarketWatch portal at the end of last week.
Recall that Bitcoin ETFs are already available to investors in several countries, including Canada and Brazil, but American financial institutions are still unable to start creating ETFs due to regulatory bans. Over the past few years, the SEC has repeatedly rejected applications or postponed decisions on several crypto ETFs, citing a lack of transparency regarding trade information, as well as the risk of digital asset market manipulation.
At the same time, the approval of the first BTC-ETF in Canada happened relatively recently – in February 2021. Accordingly, this asset class is also new to the exchange representatives in this country.
When will Bitcoin ETFs be launched?
Morgan Creek is a partner of Bitwise Asset Management. It is a provider of cryptocurrency index funds and one of the earliest contenders to create its own ETF. In short, an ETF is an index fund whose units – or portions – are traded on a stock exchange. In this case, the ETF will track the price of Bitcoin, that is, large investors will be able to make money on the movement of the value of the cryptocurrency without buying it itself.
And this sounds like good conditions for the exchange players. Still, in this case, they will get a chance to increase their own fortune due to the growth of BTC, although they will not have to own a cryptocurrency for this. Accordingly, market participants do not need to understand the features of safe storage of coins and the importance of the seed phrase. In addition, they will not have to worry about the activity of hackers and risk their funds if they receive phishing emails. Naturally, these topics are not so difficult to study, but ordinary traders are unlikely to be interested in such an excuse to spend time.
Bitwise first applied to create an ETF back in January 2019, but in October of that year, the application was rejected by the SEC. The company resubmitted the application shortly thereafter, but withdrew it in January 2020, saying the decision was «in the public interest and investor protection.»
Since then, Bitwise has grown its assets under management to over a billion dollars and recently launched its 10 Crypto Index Fund – the first publicly traded crypto index fund in the US available on the OTCQX stock market. The company also launched the Bitwise DeFi Crypto Fund, which is designed to provide an opportunity for investors to diversify their portfolios into units linked to digital assets from the decentralized finance industry.
Earlier this year, Bitwise applied to the Securities and Exchange Commission for the Bitwise Crypto Innovators ETF, an alternative investment vehicle that tracks the performance of innovative cryptocurrency companies. Offering a range of investment alternatives to institutional investors, Morgan Creek also operates a digital assets division. In addition, the company has invested in a number of cryptocurrency companies, including Bitwise and Coinbase, a US-based cryptocurrency exchange that is set to go public on April 14 through direct listing on the stock exchange, Yusko said.
Here is a quote from Mark in which he shares his attitude to the market. The cue is from Decrypt.
We view Bitcoin primarily as a late-stage venture capital investment. Instead of buying stocks, you are actually buying a piece of the protocol itself in order to own the network.
However, things may not be so simple. The day before, SEC Commissioner Hester Pearce said there was no guarantee that the regulator would approve a crypto ETF in 2021. This is partly due to the fact that the Commission is currently in a state of transition, she said. The new chairman of the regulator, Gary Gensler, has not yet been officially appointed to his post.
We believe that Mark Yusko’s prediction will come true, and the Bitcoin ETF in the US will be approved. Thanks to this, a much larger number of people will be able to connect with the cryptocurrency and make money on its movements – and this will bring blockchain assets to a new level of adoption. Thus, coins will become much more popular, and for BTC it will be possible to purchase not only Tesla.