Cryptocurrency bulls have been hopeful that the U.S. securities regulator will grant the first bitcoin exchange-traded fund (ETF) this year — but they've been left disappointed by a series of rejections and postponements. Bill Barhydt, chief executive of bitcoin payment start-up Abra, said that's because, so far, the applicants haven't fit the financial archetype that the U.S. Securities and Exchange Commission (SEC) is looking for. "I think the issue with the SEC, quite frankly, is that the people who are doing the applications don't fit mold of who the SEC is used to approving," Barhydt told CNBC's "Squawk Box Europe" on Tuesday.

"I used to work for Goldman Sachs, but if you look at how I'm dressed you probably wouldn't know it. So I probably, unfortunately, couldn't go like I am here to a meeting at the SEC to say I'm applying for the ability to issue an ETF." So far this year, the U.S. financial watchdog has rejected a fund proposed by Cameron and Tyler Winklevoss, postponed a conclusion on whether to greenlight VanEck and Solid X's proposed ETF and slapped down several bitcoin ETF proposals. Advocates of cryptocurrencies believe that institutional interest in the space is a vital step toward transforming it into a mainstream industry trusted by both big banks and consumers. But a huge downturn in prices over the last year has lowered optimism significantly over whether that institutional involvement will come any time soon, as volatile moves in prices are likely to put off large financial firms.

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