Approval of Bitcoin Futures ETF to be Delayed Until 2022?

8:19 am, Wed, 13 October 21

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Crypto investors and enthusiasts were looking forward to the approval of Bitcoin ETF for quite some time. However, according to recent news, the approval for BTC exchange-traded products might be delayed until 2022.

One of the reasons for this setback could be the regulatory uncertainties, which is a major factor and cannot be overlooked. However, whether these complications would be resolved promptly or not, is a question many have been asking.

According to reports, there are over 20 digital asset-based exchange-traded products that have yet to be approved by the Securities and Exchange Commission (SEC).

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Can This Delay Adversely Affect BTC’s Price?

The flagship cryptocurrency Bitcoin is currently trading at $55,192 (at the time of writing). It was as high as $57k until yesterday as many entities had been investing in it while looking forward to the Bitcoin ETF.

Since the approval has now been delayed, many are left to wonder if it has caused the slight price drop seen for Bitcoin today.

The senior director of ETF, Todd Rosenbluth, recently stated that the Bitcoin futures product is most likely to be the first crypto ETF that gets approved. However, it is also likely that the current regulatory complications may cause a further delay in the approval.

Rosenbluth also mentioned a possibility where the regulators might be waiting for all 20 products to meet the goals. In this way, a “first-mover advantage” can be avoided as all products can be approved at the same time.

Apart from the regulatory uncertainties, there might be another reason for the delay.

According to Jan Van Eck, CEO of Van Eck Associates, SEC’s primary concern is the difference between the actual price of Bitcoin and that of the futures contract.

When the price of BTC surges, the futures strategies can underperform around 20% in a year. Therefore, the SEC wants to get a bit more visibility of the underlying BTC markets, according to Van Eck. This is why the regulator needs to be more in control of crypto trading.

If the approval is further delayed, the price of the flagship crypto asset can be adversely affected and the bullish momentum can certainly be disrupted.

However, according to Eric Balchunas, a senior ETF analyst at Bloomberg, there is a 75% chance that the ETF will be approved this month.

What Should BTC Investors and Traders Know?

According to reports, the SEC extended the deadline for 4 BTC ETFs for 45 days this month. These include:

  • Global X Bitcoin Trust
  • Kryptoin Bitcoin ETF
  • Valkyrie XBTO Bitcoin Futures Fund
  • WisdomTree Bitcoin Trust

A BTC ETF, physically backed by Van Eck was also delayed for a second time this year, in September.

According to analysts, if the delay in ETF approval continues, the price of the largest digital asset might be hit. However, it does not make the flagship crypto asset, any less significant.

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