The recent non-decision by the SEC (Securities and Exchange Commission) regarding Bitcoin ETF (Exchange-Traded Funds) approvals has ignited fresh debates and a wave of anticipation within the crypto community. While this move may appear as a trademark action from the regulatory body, it has profound ramifications.
Even though the crypto market, particularly the Bitcoin market, has the potential to transform global finance infrastructure, the US SEC and other regulators have continually taken steps to slow their adoption of this innovative technology. Thus, when the SEC opted to defer a verdict on the Bitwise Bitcoin ETP Trust, many in the crypto community weren’t surprised.
Nevertheless, the community remains hopeful that the US top regulator would approve the Bitcoin ETF applications of leading investment managers such as BlackRock, WisdomTree, VanEck, and Invesco.
The entry of BlackRock into the Bitcoin ETF is a beacon of hope. Renowned for its strategic insight and a history of successful ETF launches, BlackRock’s filing of a spot BTC ETF is a testament that it understands the benefits of this financial innovation.
Despite BlackRock’s proposal, the US SEC remains skeptical about approving any spot BTC ETF proposals. Meanwhile, analysts and industry players argue that a Bitcoin ETF in the US is long overdue.
They further claimed that a Bitcoin ETF could bridge TradFi and DeFi and democratize Bitcoin investments for mainstream individuals. If this happens, cryptocurrencies could finally attain the mainstream credibility that has eluded them.
However, the SEC’s persistent apprehension due to multiple cases of fraud and market manipulation in the crypto industry cannot be dismissed lightly.
Historical Precedents And The SEC’s Timeline
Despite this lingering uncertainty, financial entities remain undeterred, enticed by the allure of the burgeoning crypto market. Hence, many investment management firms continue to submit their BTC ETF proposals.
While some investment managers filed Ether-futures ETF proposals believing the SEC would approve such proposals faster, the top regulator didn’t approve any. Nevertheless, many investment managers hope the SEC will soften its rigid stance with time.
The approval of the Volatility Shares 2x Bitcoin Strategy ETF, which has already amassed over $20 million in assets since its June launch, suggests the SEC is open to a change. Before the SEC decides on any spot fund applications on its desk, it analyzes these proposals for 45 days. In some instances, this period can extend up to 240 days.
Hence, market observers won’t be surprised if the US regulator postpones its decision at its next “decision period” (September). Stephane Ouellette, an influential figure in the digital asset industry, tagged the SEC as a master of the waiting game.
Many analysts agree that the SEC’s tradition of cautious deliberation remains unshaken. In an era characterized by unceasing technological advancement and a possible revolution of the global finance ecosystem, the SEC’s contemplative stance on Bitcoin ETF filings captures the essence of a cautious march toward transformative change.
As the filing of Bitcoin ETFs remains an active topic among crypto communities globally, the regulatory and financial realms are at a defining moment that will shape the future interoperability of cryptocurrencies and traditional finance. Meanwhile, the top US finance regulator continues to enforce regulatory actions on crypto firms, particularly crypto exchanges, accusing them of committing various offences.
Hence, some analysts claim that the SEC’s actions will drive away top crypto players from the US economy.