This article on bitcoin ETF approval has been written by Marcus Schmitt and published on Medium on the 1st of August 2018.
The US Securities and Exchange Commission (SEC) could approve a Bitcoin ETF in the next 18 months, said Ali Hassan, the CEO, and one of the three co-founders of asset manager Crescent Crypto.
Hassan, a former Goldman Sachs executive, was speaking at Bloomberg Markets studios about the considerable potential of passive management strategies in cryptocurrency markets. On being asked about the SEC’s rejection of Winklevoss Bitcoin ETF twice in a row, he acknowledged the US regulator’s concern about investors’ protection. However, Hassan proposed passive investments as a solution to reduce some of those concerns, saying that they will “actually increase the participation in the [cryptocurrency] market.”
Bitcoin ETF: Is This the Right Time?
“We do think that a product is coming soon,” said HasIsan. “Perhaps, in the next 18 months, we’ll see a Bitcoin-only ETF.”
Hassan continued by mentioning some exciting projects in the Bitcoin ETF space, mainly putting VanEck on his look-out list. VanEck has attempted – after failing twice – to address the regulator’s concerns by inflating its Bitcoin ETF’s share value; thereby, making it unrealizable for retail investors. Currently, each VanEck share represents approximately 25 Bitcoins (~$188,000 at the time of this writing).
Hassan’s very own asset management fund, which was launched during Q1 2018, approaches only wealthy US investors, whose annual salaries are above $200,000. To strengthen the protection, the index fund lists the top 20 coins in its portfolio, only shortlisted after they meet specific standards of market capitalization, security, and liquidity.
Hassan On Crypto Volatility, Security and Price
Jay Clayton, SEC chief, in his Feb’s address to the US Senate, had reserved his intentions to stop crypto-ETFs over their high volatility, security, long-only nature, and improper custodianship. The Bloomberg interview, while not directly referring to Clayton, pointed some of these concerns to Hassan. He responded with a claim that none of their investors have faced any problem with their index fund, explaining they had reduced the volatility by “holding 20 coins with slightly different levels of correlation and using a 90-day trailing average market cap.”
“[Our strategy] has mute the overall volatility of the portfolio relative to just Bitcoin alone,” Hassan added.
In comments that followed after the questions raised over the fund’s security, Hassan mentioned that they are avoiding the risk of exchanges by keeping all the assets in cold storage. As mentioned during one of his earlier interviews to FT, the funds are said to be stored in an unnamed facility in New Jersey.
The interview concluded with Hassan being asked about the future of Bitcoin markets.
“To the moon,” he replied.