Although many investors have are hoping that the SEC will approve the creation of the United States’ first bitcoin exchange-traded fund, a few cautious ones, such as Michael Venuto, chief investment officer at Toroso Investments prefer to avoid the volatility of speculation and instead are in fr the long term.
The likelihood of regulators approving the first U.S. exchange-traded fund to track the price of bitcoin are looming high. Investors are betting in on it.
The bitcoin ETF is generating a lot of buzz with wealthy individuals, investment funds and even a Las Vegas strip club showing interest in it. The interest in the digital currency is driving up investor sentiments to a new high.
Already Cameron and Tyler Winklevoss, both investors, have an application with the U.S. Securities and Exchange Commission for the digital currency ETF, which incidentally was filed 4 years ago. By the end of March, a final decision will be taken on whether the twin can list their ETF on the Bats Exchange.
“We have spoken to a number of our investors, particularly from the U.S., who have indicated to us that they have been buying bitcoin,” said Daniel Masters, portfolio manager of Global Advisors Bitcoin Investment Fund Plc. “They think the Winklevoss ETF and other bitcoin ETF listings will succeed.”
If the SEC were to approve the listing, it would be a huge deal since it would lend legitimacy to an asset class that has been the province of lay speculators and enthusiasts so far. With the approval, institutional funds can finally make their way into it.
As for the strip club based in LA, The Legends Room, which accepts bitcoins as payment, it can hardly be considered as institutional money.
“We are already supporters and expect to be investors as well,” said Nick Blomgren, the founder of The Legends Room. “Good opportunities to expand the market for digital currency are rare but they are possible.”
With the mist of speculation heavy in the air, the price of bitcoins have surged by more than 20% this year and has hit a record high of $1,300 last Friday. On Wednesday however, it dropped below $1,200.
As per the head of research at Blockchain Capital, Spencer Bogart, at the very least $300 million could surge into the fund in the very first week, if trading is allowed in the Bitcoin ETF.
However a few cautious investors remain unconvinced. Michael Venuto, chief investment officer at Toroso Investments LLC, which holds bitcoin investments in some client portfolios, stated “This could pop the market and I don’t want to be anywhere near it. If you’re going to buy this, it’s a long-term thing and speculating is a bad idea.”