Page 16 - Investment Advisor July/August 2021

ETF ADVISOR

By Bernice Napach

Waiting for a Bitcoin ETF? You Might Be

Waiting Until 2022

Also, Putnum launches its first ETF products.

he Securities and Exchange
Commission will approve a
TBitcoin ETF but likely not until
late this year or early 2022, according to
a panel of ETF specialists at the Coinbase
Consensus2021 virtual conference.
At least eight Bitcoin ETFs are pending
before the SEC, which has rejected all
previous filings, and several are already on
a time clock for review, which can run as
short as 45 days or as long as 240 days. A
decision on the first one up for approval in
the latest go-round — the VanEck Bitcoin
Trust — was delayed until June 17, but the what he called the “national securitized referring to the GLD ETF which invests
agency could postpone a decision again. markets,” which includes traditional finan- in gold, and has $63 billion in assets.
“I still expect the agency will issue cial assets like stocks, bonds and ETFs.
further guidance … we’re going to get A Bitcoin ETF would provide “conve- PUTNAM LAUNCHES ITS FIRST ETFs
a round of comments, and requests for nience with security,” said Nate Geraci, Putnam Investments, with $197 billion in
refiling again, which will restart the president of the ETF Store, an invest- assets has entered the ETF market with the
clock … toward the fall,” said Dave Nadig, ment advisory firm specializing in ETFs launch of four actively managed equity ETFs
chief investment officer and director of for retail investors. Investors in a Bitcoin that are similar to four of the firm’s mutual
research at ETF Trends. “I don’t think ETF don’t have to worry about losing funds. They are the Putnam Sustainable
the dates we have now … is the next ‘we the key to a private Bitcoin wallet or Leaders ETF, Putnam Sustainable Future
have to hear something.’ Those have-to’s their crypto exchange getting hacked. ETF, Putnam Focused Large Cap Growth
are never really have-to’s; the SEC could A Bitcoin ETF would make Bitcoin ETF and Putnam Focused Large Cap Value
delay as long as it wants. They can throw a “portfolio asset,” said Nadig. It would ETF (PVAL). The fund company, which
people back to the starting gate at will.” also be “the single biggest launch in the has $197 billion in assets, announced plans
The SEC could even approve sev- history of ETFs,” said Geraci. for the ETFs in February.
eral ETFs at once, instead of one at a Som Seif, the founder and CEO of Most of the Putnam ETFs have lower
time, according to both Eric Balchunas, Purpose Financial, which launched the fees than the cheapest classes of their
a Bloomberg Intelligence ETF analyst first Bitcoin ETF to come to market — in comparable mutual funds, and not all of
who moderated the session, and Nadig. Canada — expects the American market them will disclose their holdings on a
All four ETF specialists on the panel, can handle that volume or more. daily basis, unlike most traditional ETFs.
including Balchunas, believed the SEC “The most important principle is that They will instead use Fidelity’s method-
eventually would approve a Bitcoin ETF the pipes, the infrastructure supports ology for semi-transparent ETFs, dis-
and all highlighted the benefits of such that kind of demand, and there is liquid- closing on a daily basis a tracking basket
a product. ity in the background for this asset cate- of holdings that has a 70%-80% overlap
“We desperately need a crypto ETF,” gory,” he said, referencing the Grayscale with actual portfolio holdings and dis-
said Nadig, noting there is danger in Bitcoin Trust, which has more than $30 closing actual holdings on a quarterly
not recognizing the value of moving billion in assets. basis with an eight-day lag. Two of the
information and money across the divide “It’s going to be massive, It’s going new ETFs are focused on environmen- Adobe Stock
between the crypto financial market and to be bigger than gold,” said Balchunas, tal, social and governance factors.

14 INVESTMENT ADVISOR JULY/AUGUST 2021 | ThinkAdvisor.com