Nelson Wang
Nelson Wang is CoinDesk's news editor for the East Coast. He holds BTC and ETH above CoinDesk's disclosure threshold of $1,000.
AUSTIN, Texas — Officials from investment firms Grayscale and Bitwise are optimistic a spot bitcoin exchange-traded fund (ETF) will finally be approved by the U.S. Securities and Exchange Commission (SEC) soon.
“There’s a perception in the crypto industry that the SEC is just saying no, and that’s not what the facts show,” said Matt Hougan, chief investment officer for Bitwise, at CoinDesk’s Consensus 2022 here on Thursday.
Grayscale is owned by DCG, the parent company of CoinDesk, and runs the world’s largest bitcoin fund, the Grayscale Bitcoin Trust (GBTC). Grayscale and Bitwise face impending deadlines for their spot bitcoin ETF applications. Grayscale’s proposal to convert GBTC to an ETF is going through a public comment period, with the deadline for the SEC’s decision coming July 6. The deadline for a decision on the Bitwise application is June 29.
Hougan pointed out the SEC has approved a limited interval market, and a bitcoin futures ETF based on the 1940 Investment Act. More recently, two bitcoin futures ETFs have been filed based on the 1933 Investment Act, the same act that spot bitcoin futures ETFs have been filed under.
“That’s a progression that ends in a spot bitcoin ETF,” Hougan said. “So they really are making progress, just not at the pace of the crypto community. But it’s wrong to see [the SEC] as just [holding things up]."
David LaValle, global head of ETFs at Grayscale, agreed.
“It’s not that long ago that there really was a question of if this was going to happen,” he said. “And now it’s clearly a question of when it’s going to happen.”
LaValle noted further that if the SEC rejects Grayscale’s application by July 6, the company would be “very focused on addressing all options.”
Valkyrie's position
Lori Tiernan, the chief strategy officer for Valkyrie, was also on the panel and optimistic a spot bitcoin ETF would be approved, although she said she expected it to come in the next several years.
Last month, the SEC approved Valkyrie’s application for a bitcoin futures ETF, the second such ETF to win approval under the Securities Exchange Act of 1934, leading to greater optimism about the approval prospects of a spot bitcoin ETF.
Bitwise’s Hougan also said he believed a spot bitcoin ETF would not initially grow as large as some in the bitcoin community were expecting.
“I think the perception is that day one, a bitcoin ETF launches, and day two it has $30 billion in assets, and that’s just not the way ETF works,” Hougan said. “GLD is the fastest-growing ETF of all time. It hit $1 billion in three days, then hit $3 billion after a year, and after five years, it hit $30 billion.
“I think the effect of a [spot bitcoin] ETF will be overhyped before it launches, and then people will dismiss it. Eventually, [an ETF] will be the largest way that investors will hold bitcoin,” Hougan concluded.
Read more: Consensus 2022 Speaker Profile: David LaValle
