- The United States Securities and Exchange Commission (SEC) has a bad track record of approving exchange-traded cryptocurrency funds (ETFs). However, analysts believe times are changing and the SEC will be more open to the idea of Bitcoin ETF in the near future.
The United States Securities and Exchange Commission (SEC) has a bad track record of approving exchange-traded cryptocurrency funds (ETFs). However, analysts believe times are changing and the SEC will be more open to the idea of Bitcoin ETF in the near future.
Why does the SEC not approve a Bitcoin ETF?
So what exactly scares the SEC from approving a Bitcoin ETF?
Eric Balchunas, a senior analyst at Bloomberg, believes that concern about surveillance and manipulation is the main concern for the SEC.
“The main reason they refuse to do so is surveillance and manipulation. That’s why they say there isn’t enough oversight in the underlying market from regulators. If something goes wrong, there’s no way to know how it went wrong or who did it, X, Y or Z. ”
Surveillance is a crucial issue that regulators continue to address, but a series of improvements are required to tackle it soon. The SEC cannot confirm a Bitcoin or crypto ETF as there is a gap in regulation.
Market manipulation is a big hurdle
However, other issues highlighted include manipulation of the market. While the traditional financial system has not been able to ban manipulation from the market, regulators use it as a shield to keep ETFs under lock and key.
The recent GameStop debacle is a prime example of market manipulation highlighted by the SEC. Still, Balchunas believes the SEC should eventually endorse a Bitcoin ETF “against other products they’ve approved and the way those other products work.”
The claim that “approval can come within 12 months”
Galaxy Digital’s Mike Novogratz says the SEC will approve the Bitcoin ETF within 12 months. A new one is added every day to the debate about what is the right time for the SEC to approve a Bitcoin ETF.
After receiving only pessimistic responses from the SEC so far, Bitwise has filed a new ETF application to provide investment results corresponding to the companies’ performance in the Bitwise Crypto Innovators Index. However, it is not known whether he will also be accepted.