Reggie Browne, who is a senior managing director of the ETF group at Cantor Fitzgerald, isn’t holding his breath for a bitcoin ETF. Despite the determination of crypto asset managers jumping through hoops to satisfy US regulators, Browne, who earned the nickname as “the Godfather of ETFs” from Forbes for his influence over the $4.7 trillion market, has his doubts, saying it will happen “no time soon.”
Browne addressed what he finds to be slim odds of a bitcoin ETF amid an inability by regulators thus far to craft a regulatory framework by which cryptocurrencies could operate. In the interim, “it’s very difficult for the commission to wrap their heads around a positive approval because there’s no data yet…the markets just aren’t here,” said Browne, who was speaking at the Georgetown University’s Financial Markets Quality Conference held in Washington, D.C. this week, an event at which SEC Chairman Jay Clayton was also present. Browne’s remarks were cited in Business Insider.
There’s a bit of a catch-22 in the crypto markets, as the arrival of a bitcoin ETF is widely deemed to be a sign of maturity in the nascent market, which just celebrated its 10th anniversary. Meanwhile, the approval of such a product is dependent on regulation that is waiting for a more mature market. The SEC has already declined nine bitcoin ETF applications, and the crypto community has their hopes pinned to a product designed by asset manager VanEck and blockchain startup SolidX.
VanEck Director of Digital Asset Strategies Gabor Gurbacs on Nov. 1 told Fox Business: “I don’t know exactly how close we are but we are the closest we can be,” adding: “It’s very clear to me America wants a bitcoin ETF and we are here to build it.” In the meantime, VanEck is waiting on pins and needles for SEC feedback on its application.
It isn’t the first time a Wall Street executive has weighed in on the fate of a bitcoin ETF. In recent days Larry Fink, who is at the helm of BlackRock, the world’s largest asset manager boasting $6.3 trillion in assets under management, quashed any expectation that the firm would issue its own bitcoin ETF in the near future. BlackRock, which is one of a trio of asset managers that together control 82% of ETF market share, is on the sidelines until there are signs the crypto market is “legitimate,” which to him requires government backing.
Meanwhile, if the SEC’s motivation for suppressing a bitcoin ETF is, in fact, a lack of data and markets, as the Godfather of ETFs suggests, they are going to have fewer reasons to decline the product once institutional capital makes its way into the crypto space, which is largely expected to coincide with the opening of regulated crypto exchange Bakkt this year.