Still, during a conference session on April 11, panelists discussed when the market might see an SEC-approved spot Bitcoin ETF.
Morrison Warren, a partner and co-chair of the investment management practice group at law firm Chapman and Cutler, said he doubts such an approval will take place this year.
“I wish I could say I was optimistic,” Mr. Warren said. “The challenges we face at this stage are difficult to resolve in the short term.”
The lawyer’s comments came during a session moderated by Mr Hougan, who asked panelist and lawyer Jeremy Senderowicz, a shareholder at law firm Vedder Price, to explain why the SEC approved futures ETFs bitcoin but has not yet given the green light to a bitcoin spot ETF.
Bitcoin futures ETFs maintain exposure through a regulated futures exchange, Senderowicz said, adding that the SEC has a lot of experience with products based on regulated futures exchanges. “It’s something they know how to regulate,” he said. “Many of the issues specific to investment company law that arise if a fund held cryptocurrency directly do not apply when it holds it in futures contracts.”
In a later interview with IPHougan said regulatory uncertainty around the crypto market is keeping many institutional investors out of the market.
“Regulations are still evolving, and the approval of a spot ETF would be a major step in the maturation of this regulatory framework,” Hougan said, adding that as a result, it would “likely give more confidence to more of institutions and therefore bring them into space.”
Hougan thinks institutions are “aggressively pursuing crypto because it’s an attractive alternative asset,” he said.
“It has high historical returns, it has low correlations to other assets, it’s liquid unlike most alternatives,” Hougan said. “And so, as a small part of a portfolio, I think the volume of interest from the institutional community is growing more broadly for crypto, and an ETF would make it so much easier.”
Bitwise currently offers two exchange-traded funds, the $813 million Bitwise 10 Crypto Index Fund and the $104 million Bitwise Crypto Industry Innovators ETF.