Bitcoin ETF coming Valkyrie Kilburg
Bitcoin,  Regulation

Valkyrie’s Jeff Kilburg confident Bitcoin ETF coming this year

With Gary Gensler at the Security and Exchanges Commission and firms like Tesla buying BTC, Kilburg believes the Bitcoin exchange-traded fund’s time has come

A bitcoin exchange-traded fund will see the light of day this year, according to Jeff Kilburg, the founder and CEO of portfolio management firm KKM Financial and a partner at bitcoin fund manager Valkyrie Digital Assets.

In an interview with CNBC published on Feb. 11, Kilburg said that he believes the U.S. Securities and Exchange Commission (SEC) will allow the launch of a Bitcoin ETF this year, and he wants to be the one that runs it.

Valkyrie filed with the SEC to launch a bitcoin ETF in late January, saying it would be a “win-win solution for all active and passive investors, even the ‘hodlers.’” 

Bitwise is also making another run at an ETF, having filed on Feb.5 to create one based on its Bitwise Crypto Innovators Index. And on Dec. 30, VanEck applied to build a Bitcoin ETF using its MVIS CryptoCompare Bitcoin Benchmark Rate, which it said is based on the five most trustworthy cryptocurrency exchanges.

While firms like Gemini and Bitwise repeatedly tried and failed to win SEC approval over the last few years, Kilburg cited the change in leadership at the SEC and promising developments in the space as reasons for his optimism, saying “this is all coming together here in 2021.”

First and foremost, as Modern Consensus reported in mid-January, President Joe Biden selected Gary Gensler as the new chairman of the SEC. Gensler, who spent the last few years as a professor teaching digital assets and blockchain at MIT, is expected to provide both a clearer and—it is widely hoped—a more favorable regulatory environment than his predecessor, Jay Clayton. 

Clayton was openly opposed to bitcoin ETFs, saying that the level of price manipulation in the cryptocurrency market remains too high. 

Kilburg also cited Tesla’s announcement this week that it will accept payment in bitcoin and that it had invested $1.5 billion from its corporate treasury into the largest cryptocurrency. The launch of Chicago Mercantile Exchange’s (CME) ether futures in December was another “huge win” that improves the chances of approval of an ETF, he added

Dave Nadig, CEO and director of research at news and research firm ETF Trends, predicted the growing success of over-the-counter (OTC) stocks backed by bitcoin like the Bitwise 10 Crypto Index Fund, Grayscale Bitcoin Trust and newly-launched BlockFi Bitcoin Trust will “force the SEC’s hand.” He told CNBC: 

“When we have companies like Tesla making bitcoin a major balance-sheet asset and we have companies for whom that is their whole balance-sheet asset trading on the pink sheets, I think it’s going to get hard for them to say no for very much longer.”

Despite that, Nadig was less certain that it will happen this year. “I’m maybe not quite as Pollyanna about it,” he said. “I think maybe we’re still looking at ’22. But I do think it’s inevitable.”

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Adrian is a newswriter based out of Pisa, Italy. He's passionate about cryptocurrency, digital rights, IT, tech and futurology and likes to think about the future in a positive way.