It's a make-or-break moment for bitcoin ETFs.

The Securities and Exchange Commission has set an Oct. 13 deadline for approving a bitcoin-based exchange-traded fund from Bitwise Investments, a move that could mark a meaningful milestone in bitcoin's long-term growth story.

The digital currency has been volatile this year, falling by over 20% in one week in late September to its lowest level since July amid increasing skepticism and uncertainty. Bitcoin hit its 2019 high of over $11,000 in June, according to cryptocurrency exchange Bitstamp.

Interestingly, bitcoin is still 2019's best-performing asset, up almost 123% for the year.

That volatility isn't stopping Matt Hougan, managing director and global head of research at Bitwise, from being optimistic about the prospects for his firm's bitcoin ETF, which, if approved, would trade as the Bitwise Bitcoin ETF Trust.

"We're closer than we've ever been before to getting a bitcoin ETF approved," Hougan, former CEO of Inside ETFs, said Monday on CNBC's "ETF Edge."

"Sometime before Monday, the SEC has to give its decision: yes or no. They have no more ways to postpone it at this point," Hougan said. "We will hear clearly between now and Monday what they think, and then, depending on what we hear, we'll go forward from there. But it should be a very exciting week."

The road to bitcoin ETF approval has been a long one. The Facebook-famous Winklevoss twins first filed for a bitcoin ETF in 2013, launching a yearslong fight for approval with the SEC that ended in disappointment.

It's also come with a few casualties. In January, a government shutdown threw a wrench in many issuers' plans, with Cboe Global Markets withdrawing its application for a bitcoin-based ETF. In mid-September, VanEck and SolidX followed suit, pulling their proposal for a bitcoin-based ETF from SEC consideration.

But in the last few years, the outlook for Bitwise's proposal has improved significantly, Hougan said.

"The evolution of the bitcoin market over the last two years is from night to day," he said Monday, adding that some of the SEC's chief concerns about approving a bitcoin ETF — mainly custody and proper regulation — are starting to get resolved.

"Two years ago, there were no regulated, insured custodians in the bitcoin market. Today, ... there are big names like Fidelity and CoinBase [with] hundreds of millions of dollars of insurance from firms like Lloyd's of London," he said. "Two years ago, there were no regulated crypto exchanges. Now, six of the 10 big crypto exchanges are regulated by the New York Department of State with market surveillance technologies in place. And, most importantly, two years ago, it was a one-sided, inefficient market. Today, we have $200-plus million in volume and regulated futures every day."

Now, bitcoin is "among the most efficient institutional markets in the world" because of its narrow spreads and the involvement of major market makers like Jane Street Capital and Susquehanna, Hougan said.

All of those factors could bring Wall Street one step closer to welcoming the first-ever bitcoin ETF, a long-awaited event that would open up the crypto space to many more buyers, Hougan said.

"The opportunity that's taking place in bitcoin, crypto and blockchain today is one of the most exciting wealth-generation opportunities in the world," he said. "The problem is while big institutions have safe, secure ways to buy bitcoin today in private funds that are available only to the ultra-high-net-worth people, regular investors don't have a safe way."

A bitcoin ETF would change that layout entirely, the research pro said.

"What the bitcoin ETF would allow everyday investors to do is have safe, simple, secure access to the wealth generation taking place in bitcoin and crypto. It would let financial advisors give it to their clients easily instead of them going rogue," Hougan said. "It's just trying to solve that problem of simple, secure access to what is emerging as a very important technology and a very important asset class in the market."

Bitcoin was up by about 5% by Monday's stock market close, according to Bitstamp.

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