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‘2022 is the earliest’ we could see a bitcoin ETF: Greg King

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Greg King, CEO of Osprey Funds, joins Yahoo Finance’s Jared Blikre and Seana Smith to discuss Treasury Secretary Janet Yellen’s statements on crypto and stable coins, and why bitcoin is continuing to see a selloff in the markets.

Video Transcript

JARED BLIKRE: Welcome back to Yahoo Finance Live. I'm Jared Blikre. It's not only stocks selling off today, also Bitcoin and crypto in general. I'm looking at Bitcoin, down about 3% now. We're going to talk about why exactly, or potentially, what's going to happen, with the CEO of Osprey Funds Greg King. Thank you for joining us here.

We were just having a discussion with the previous guest about some of the key levels here. What's your take on all of this? Because we've got some of our-- well, let's just face it. They're called the Plunge Protection Team, the president's working group on markets. They're kind of talking down stablecoins here. Is that a risk for the other coins here, like Bitcoin and also Ethereum?

GREG KING: Yeah, I think all this chatter is not particularly helpful for Bitcoin or Ethereum. Obviously, the big market sell-off today also not doing any favors. We take a long-term view, though. Bitcoin is here to stay. The inroads and on-ramps to investing are being built out. The institutional investor interest is very robust. And we see some activity amongst the Bitcoin whales that they are starting to re-accumulate at around the $30,000 level.

So, you know, this is one of the things with investing in crypto, is dealing with the drawdowns, rightsizing that portfolio. So it's something investors need to be mindful of vis a vis their own risk tolerance. But it could be an opportunity to make an investment that will pay off long-term.

SEANA SMITH: So Greg, it doesn't sound like you think that the recent volatility that we've seen, the fact that we're now trading around 30,000, that it's spooking the interest that we could see from institutional investment. You say that that interest is still there, and it's still pretty healthy?

GREG KING: Yeah, we think so. I think that institutions are taking their time. And some-- we've seen very high profile, let's say, certain CEOs of certain car electric-- electric car manufacturers talk about Bitcoin in their strategies. There are lots of others that are not so overt about what's going on. And I think that you will see continued institutional interest.

Bitcoin has established itself, in my view, as a substitute, a potential substitute, to gold or real investments, hard investments such as gold, that can help diversify a portfolio, as your previous guest said. So we don't see that changing, although the volatility can be stomach churning at times.

JARED BLIKRE: Yes, lots of volatility here. I want to talk to you about the landscape for a Bitcoin ETF in the US. Everybody's been waiting with bated breath for approximately three or four years now. It looks like Gary Gensler isn't really keen to get off the dime just yet. I know you have an ETN, low cost compared to some of your competitors. Where are we in the approval process? And when do you think it happens?

GREG KING: Yeah, just to be clear, we actually have a trust. It's a Bitcoin Trust that holds the assets custody with Fidelity Digital. And it is the lowest cost provider. The ticker is OBTC. Here's what we think. There was a lot of hype at the beginning of the year around the new administration with Gary Gensler coming in. You saw a flurry of filings, from established companies to sort of newcomers, chasing that Bitcoin ETF idea.

This is something that we've actually been involved with for a long time. The parent company, the Osprey, filed for a Bitcoin ETF in 2017. So we've been in dialogue with the SEC staff since then. And if a Bitcoin ETF is coming through the Gensler administration, my view is it's not going to happen this year. I think there are so many things on their plate, it's going to take them a while to assess the situation.

There's also been quite a bit of sort of a body of language and rhetoric and points that have been made by the staff with previous applications that need to get addressed. And so this isn't a slam dunk. And I think the market's partially calibrating to that because I do think that was part of the run-up earlier in the year to 64,000, where you saw so many filers for a Bitcoin ETF.

It seemed like almost a foregone conclusion to lots of folks. And I think there's a bit of a hangover effect there, where people are maybe realizing this might not be quite around the corner. But our hope is that it does come eventually. I would just say 2022 is probably the earliest we might see that.

SEANA SMITH: OK, yeah, I was going to ask you what a more realistic timeline was for that. So then going off of that, Greg, I guess, what would you say is how critical is it that the US leads on the regulatory front when it comes to crypto, just in terms of establishing the US as one of the main players and one of the leaders in this space?

GREG KING: Well, unfortunately, I don't think that they have led, at least in our part of the ecosystem asset management. You've seen Bitcoin ETFs approved in Canada and Europe and elsewhere. And the US is decidedly behind. I think that's obviously by choice. I think they're thinking about this, if I had to guess, more holistically, beyond just whether a Bitcoin ETF makes sense or not at this point, but really, more along the lines of what precedent are we going to set when we approve one, and what does that mean as far as an Ethereum ETF or et cetera, et cetera, et cetera.

That's part of why we're focused on building out our product line into the ecosystem beyond Bitcoin. We're big Bitcoin fans, but crypto investing and such is a lot more than just Bitcoin. In fact, Bitcoin is less than 50% of the market cap these days. So it continues to get built out behind the scenes because at the end of the day, it's really just tech investing. But the headlines are always about the Bitcoin ETF and about the Bitcoin price. And we understand that because it's the most widely held of the cryptocurrencies.

JARED BLIKRE: Yeah, and it's too bad because most retail investors in the US simply don't have access to a fund. Greg King of Osprey Funds, CEO, thank you for stopping by.