Do We Really Need it? SEC Fuels Debate On Controversial Bitcoin ETF
The U.S. Securities and Exchange Commission (SEC) said it needs more time before making a final decision regarding Bitcoin ETF (exchange traded fund) and asked everyone for additional comments. And now the cryptoverse is yet again debating the need for this investment instrument that might bring more institutional investors into the crypto market, but might cause other problems, also.
On Monday, the SEC delayed its decision regarding the VanEck (an ETF provider) Bitcoin ETF application again. The new deadline for the decision is August 19 and it can be delayed until October.
If approved, VanEck would be allowed to list the first ETF in the U.S. that is fully backed by “physical” bitcoins in its reserves, which is believed by many to be a huge catalyst for the price of bitcoin.
“Given that their [SEC] issues are with the underlying Bitcoin market, not sure why they just don’t deny it as opposed to stringing along the crypto faithful with false hope,” according to Bloomberg Intelligence analyst Eric Balchunas.
As delay was expected, many considered this decision as a non-event - bitcoin price even jumped following the announcement before correcting lower. At pixel time (06:07 UTC,) bitcoin trades at USD 7.900 and is down 1.25% in the past 24 hours.
In either case, this "non-event" has renewed debates about the necessity for an ETF to move the market up.
For example, Andy Bromberg, cofounder of CoinList, a token sale platform, says he's not sure Bitcoin ETF matters as much anymore.
“We’re increasingly seeing that retail brokerages are going to offer bitcoin to their clients. Once you see that, once you see this widespread adoption, you don’t necessarily need the ETF anymore,” he told Yahoo Finance.
However, economist and trader Alex Krüger argues that the SEC approving a bitcoin ETF "would be a very big deal and go long ways into legitimizing crypto in the eyes of institutional investors with deep pockets."
Meanwhile, another argument against Bitcoin ETF was made in August 2018 when two prominent figures of the cryptoverse - Andreas Antonopoulos and Nick Szabo - warned that an approved ETF “might cause more problems than it’s worth.”
“I think it's a terrible idea. <...> ETFs fundamentally violate the underlying principle of peer-to-peer money, where each user is operating not through custodian, but has a direct control of their money, because they have direct control of their keys. Your keys - your bitcoin, not your keys - not your bitcoin,” Antonopoulous said back then adding that Bitcoin ETF will become an instrument to manipulate bitcoin prices, scaling and forking debates.
You can share your own opinion about Bitcoin ETF with the SEC here.