Bitcoin ETF Issuer Must ‘Look, Feel and Smell’ the Part, Says Abra Chief

With the bitcoin price perched above $7,300 and moving higher, traders have clearly shrugged off the uncertainty surrounding a bitcoin ETF for now. Nonetheless, the market has forgotten about it altogether as investors keep a potential VanEck/SolidX product within sight, despite the regulatory delays. Bill Barhydt, who is at the helm of Abra, a cryptocurrency wallet startup, is a Wall Street veteran who suggests the securities regulator has not evolved enough to embrace the crypto community.

“I think the issue with the SEC, quite frankly, is that the people who are doing the applications don’t fit [the] mold of who the SEC is used to approving,” Barhydt told CNBC.

For instance, Barhydt, who is a Goldman Sachs alum, suggests unless the issuer “looks, feels and smells” the part, it’s going to be an uphill battle for a bitcoin ETF approval. He uses himself as an example: “I probably, unfortunately, couldn’t go like I am here to a meeting at the SEC to say I’m applying for the ability to issue an ETF.”

Abra CEO Bill Barhydt
Source: CNBC

And while Tyler and Cameron Winklevoss might look the part, this logic places the odds more against a blockchain startup like Gemini exchange, which has so far had its bitcoin ETF application rebuffed twice, and more in the corner of traditional Wall Street firms, like a VanEck, which has been around since 1955.

Even if the SEC decides once again at the end of this month to postpone its decision on the VanEck product, Abra’s Barhydt belives a bitcoin ETF is in the cards. “It’s going to happen in the next year, I would actually make a bet on it. There is too much demand for it,” he told the business network. Institutional capital should follow alongside the rise of custody solutions. One caveat is the volatility that’s inherent in the bitcoin price, which could also be keeping institutional capital sidelined even though volatility has subsided of late.

In the interim, institutions can trade bitcoin futures, which they are doing. Jonathan Cheesman of crypto asset management firm Distributed Global pointed out that “bitcoin shorts remain persistent” and largely intact for the past week even as the bitcoin bulls have wrestled back control.  Meanwhile, it’s entirely possible that an ETH futures product could emerge before a bitcoin ETF.

Abra development

Meanwhile, the Abra crypto wallet, which supports more than two dozen digital currencies, just launched support for SEPA payments, which gives European customers the ability to purchase cryptocurrencies via bank transfers. Barhydt tweeted the development, which is specific to SEPA deposits. Fiat withdrawals via SEPA are next in the pipeline.

Featured image courtesy of Shutterstock.

Gerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. She owns some BTC and ETH.