Bitcoin-based exchange-traded funds are closer than ever to becoming a reality, but approval is still a ways away, one market analyst says.
The Securities and Exchange Commission is currently reviewing VanEck's second proposal for a bitcoin ETF. Officials now have roughly two weeks to decide whether to approve, reject or extend their review window.
Even with Coinbase's direct listing reinvigorating interest in the cryptocurrency market, prospective bitcoin ETF issuers will still face obstacles, says Bitwise Asset Management chief investment officer Matt Hougan.
"The crypto industry … has gone through this massive institutional maturation. Every aspect of it has improved significantly over the past five years, over the past three years and over the past year. Coinbase going public is just another part of that narrative," he told CNBC's "ETF Edge" this week.
"So, absolutely, we're getting closer to a bitcoin ETF. I continue to think it's a matter of when and not if, but we're not all the way there yet," he said. "The SEC has been asking good questions and companies like Bitwise and others have been working to address those. But I do think we're getting closer."
The nomination of Gary Gensler, a former Goldman Sachs executive who taught a class on cryptocurrencies and blockchain at MIT, to lead the SEC could push things forward, Hougan said.
"I think it helps in that it's a new administration, a new, fresh set of priorities and that he's an expert on this space, but I don't think there's any magic sauce," the CIO said.
"The market has to be good enough, has to be institutional enough, has to be mature enough to support an ETF before the SEC greenlights one. But the good news is I do think we're closer to that point today than we were in the past, and I really think we're getting there."