As a matter of fact, 2021 is already the year of a bitcoin ETF, but not in the US.
In fact, on February 18th, 2021, a bitcoin ETF was launched in Canada. It’s called the Purpose Bitcoin ETF (BTCC) and has been trading on the Toronto Stock Exchange since Thursday.
Given that the fund is available in both Canadian and US dollars, it is possible that it will also be used by US investors or speculators, and if that happens, it could pave the way for a bitcoin ETF to be launched on some US exchanges.
In fact, there are already several similar derivatives traded on exchanges in Europe, but not yet in the US, and the BTCC is by far the largest in North America.
The largest market for bitcoin is the United States of America, so the fact that there are already similar ETFs abroad is of less importance than the fact that there are none in the US.
Certainly, the success or failure of the Canadian ETF could also have ramifications for the SEC’s decisions in this regard.
It should be remembered that, to date, all similar proposals sent to the US Securities and Exchange Commission have been rejected or withdrawn, albeit in a different context.
Institutional investors want Bitcoin ETFs
In 2020, many institutional investors entered the crypto market, and this is clearly changing the scenario. Despite this, the SEC still seems rather dubious about a bitcoin ETF in the US, not least because it would be a product aimed at retail investors.
As far as institutional investors are concerned, there are already several products that allow them to take positions on the crypto markets, some of which are quite advanced. What is missing in the US market is a tool for retail investors that allows them to take positions easily, without having to deal with buying and storing tokens.
But the scenario has changed so much in the last 12 months that some are betting that this could be a good year. For example, a few days ago New York Digital Investment Group (NYDIG) made a new application to the SEC for approval of its NYDIG BITCOIN ETF, launched in partnership with Morgan Stanley.
It is worth noting that the chairmanship of the US government agency that oversees the financial markets has also recently changed.
The launch of a bitcoin ETF on the US stock exchanges would instantly give tens of millions of people the opportunity to gain exposure to BTC extremely quickly and easily. In fact, there are already apps that allow people to do this, such as Robinhood, but they are aimed at a much younger age group than those who generally hold large assets.
The fact that the Toronto ETF has already shown clear signs of strong interest on the first day of trading suggests that there may actually be a good chance that the SEC will approve one for the US as early as 2021.
Optimism in this case, however, often turns out to be excessive, as it has been over the past two or three years, for example.