Spot bitcoin ETF unlikely till at the least mid-2022: Valkyrie Funds CIO

An exchange-traded fund backed by bodily bitcoin continues to be far off, says the person behind the second-ever bitcoin futures ETF.

The Valkyrie Bitcoin Technique ETF (BTF), an actively managed product that holds a mixture of front-month bitcoin futures contracts, Treasurys, company bonds and money, adopted in ProShares’ footsteps final week. Valkyrie’s ETF launch attracted $10 million within the first 5 minutes of buying and selling.

Sadly for bitcoin ETF hopefuls, these debuts do not essentially deliver the Securities and Trade Fee any nearer to approving ETFs based mostly on spot bitcoin, Valkyrie Funds chief funding officer Steven McClurg instructed CNBC’s “ETF Edge” on Monday.

“I do not assume we see a bitcoin spot ETF till at the least center of subsequent yr,” McClurg mentioned. “The employees continues to be making an attempt to get their heads round what precisely is happening with these exchanges. They’re making an attempt to place just a little bit extra regulatory construction round them earlier than they … transfer ahead with this.”

Greater than a dozen companies have filed for ETFs monitoring bitcoin itself, however none have obtained SEC approval as a result of regulatory issues together with points round custody. Nonetheless, the SEC’s first arduous deadline is approaching: It should approve or deny VanEck’s proposal for a bodily bitcoin ETF by Nov. 14.

Within the meantime, some are leaping on the futures bandwagon, with VanEck slated to be subsequent to market.

Although BTF did not make as huge of a splash as ProShares’ billion-dollar debut, Valkyrie’s technique may repay in the long term, McClurg mentioned.

“We’re OK with having a fraction of what ProShares has. ProShares is a goliath. We’re a brand-new issuer, McClurg mentioned. “We additionally proper now care extra concerning the unfold.”

“We have been buying and selling inside a penny on the market,” he mentioned. “We additionally care about monitoring error. These are issues which are actually going to matter in the long term and if we will preserve these issues actually tight within the first few weeks, then I feel that we’re actually going to be the long-term play right here.”

BTF gained greater than 4% on Thursday. The ProShares Bitcoin Technique ETF (BITO) climbed practically 4%.