When Bitcoin, the largest cryptocurrency by market value, hit an all-time high this year, at least 18 applications for Bitcoin-based exchange-traded funds or ETFs were filed with the Securities and Exchange Commission.

None have been approved yet, and a physical Bitcoin ETF is unlikely to be approved this year, Todd Rosenbluth, director of ETF and mutual fund research at CFRA, told CNBC Make It.

However, SEC chairman Gary Gensler recently signaled that he was ready to consider a futures-based Bitcoin ETF under strict rules.

A physical ETF holds the underlying assets or securities on which its value is based. In comparison, a futures-based ETF tracks futures contracts and provides exposure to an asset without taking direct ownership. In this case, a physical Bitcoin ETF would hold Bitcoin and track its price, while a futures-based Bitcoin ETF would replicate Bitcoin futures contracts.

After Gensler’s speech, a handful of companies filed for futures-based Bitcoin ETFs with the SEC.

But while Gensler seems more comfortable with futures-based Bitcoin ETFs than physical ones, they are probably still a long way off. “I expect a futures-based one [bitcoin] ETF approval is more likely in 2022 than in 2021, ‚ÄĚsays Rosenbluth.

This is likely due in part to concerns from the SEC. In addition to concerns about fraud and volatility in the cryptocurrency space, the SEC may also be concerned about how the demand for a physical Bitcoin ETF would affect the overall market.

Futures-based Bitcoin ETFs would also come with unique risks, including the fact that they don’t necessarily track the price of the underlying security and come with higher costs, says Rosenbluth.

Steps for SEC approval

What does this all mean for investors? Not much yet.

Just because there are numerous potential ETFs doesn’t mean they’ll get approved any faster, says Rosenbluth. “There are several steps in the potential approval process, and each product is often in different stages of that approval process.”

Right now, the SEC is likely looking for more information on any potential fund, he says. And based on Gensler’s recent comments, the SEC appears to be looking first for further regulation in the cryptocurrency space.

While investors can see a lot of headlines regarding Bitcoin ETF filings or updates as part of the approval process, it doesn’t necessarily mean anything, Rosenbluth explains.

“I wouldn’t focus too much on where we are, whether the SEC is going to approve something or not. Until they approve something, there’s nothing an investor can do,” he says. From now on “be patient”.

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