NEW YORK: US Securities and Exchange (SEC) commissioner Gary Gensler gave what may be the strongest sign of support yet from the agency for a bitcoin exchange-traded fund (ETF). Crypto fans, though, are not exactly thrilled.

       At the centre of the issue is what an approved fund would track. Gensler, in his first major speech centred on cryptocurrencies, suggested an openness to an ETF focused exclusively on bitcoin futures, which require that investors put down a substantial amount of money on margin to trade.

       That’d be different from a bitcoin-backed fund, which is what most crypto enthusiasts have been hoping for.

       “We see bitcoin futures-based funds as inferior products that have consistently underperformed the bitcoin price and bring additional complexities with regard to how they must be managed, at a higher cost than ETFs,” Matthew Sigel, head of digital assets research at VanEck, said by phone.

       “Simply put, they are substandard vehicles.” His firm has crypto-focused applications in registration.

       US regulators have yet to approve a crypto ETF though more than a dozen companies are looking to launch one.

       Nine have filed for authorisation since the end of 2020, according to a tally kept by Bloomberg Intelligence.

       Policy makers have in the past voiced concerns over fraud and price manipulation, as well as worries over how a fund would be able to handle bitcoin’s infamous volatility.

       As part of his comments, Gensler said that while he’s interested in blockchain – or the technology underpinning digital assets – and sees potential value in crypto, he plans to move aggressively to protect investors.

       Meanwhile, Canada has approved several bitcoin ETFs – the first-ever in the country launched at the start of the year.

       “Investors want the real deal and a quick glance north of the border shows the real deal not only exists, but is prospering,” said Nate Geraci, president of the ETF Store.

       Most pending ETF applications have been filed under 1930s laws that allow stock exchanges to list products.

       Bloomberg reported that Gensler is hinting that he’d like to see a filing that seeks approval through a 1940 law that governs mutual funds.

       “What the SEC seems to be doing is pushing individual investors into higher-risk, lower-quality products to get their bitcoin exposure instead of sticking with the tried-and-true ETF wrapper, which has given millions of investors exposure to so many different assets, many of which are much more speculative and illiquid than bitcoin.” — Bloomberg