US SEC Now ‘On the Clock’ for Key Bitcoin ETF Decision
The bitcoin (BTC) ball is decidedly in the regulators’ court in the United States, where the Securities and Exchange Commission (SEC) is now “on the clock” – with the crypto world eagerly awaiting its response.
Many believe that approval of a bitcoin exchange-traded fund (ETF) in the United States would be a watershed moment for BTC adoption. And a new hope has emerged after the Chicago Board Options Exchange (CBOE) filed an application to list a BTC ETF from the New York-based investment management firm VanEck and its Bitcoin Trust.
The CBOE has filed a document named the 19b-4 Form, which obliges the SEC to begin a legal review into the application.
VanEck director Gabor Gurbacs tweeted a photograph of the relevant paperwork and wrote,
“It’s time for US regulators to step up to the plate and approve a bitcoin fund.”
From here, the SEC has three possible courses of action. It can choose to:
- approve the application;
- turn it down;
- or extend its review period by up to 240 days.
But whatever it decides to do, highlighted Bloomberg’s senior ETF analyst Eric Balchunas, the regulator has just 45 days, beginning on the day it acknowledges receipt of the form, to make up its mind.
“Boom! [...This] means the SEC is officially ON THE CLOCK now.”
He pointed out that “historically, the SEC has rejected every bitcoin ETF application, including previous efforts by VanEck.” While other BTC ETFs have reached the 19b-4 stage before, all have eventually been turned down or withdrawn. The analyst, who previously forecasted that an ETF will be approved by the end of September 2021, noted that “this is the first” application “in the new wave” of filings.
As reported in February, NYDIG, a Stone Ridge-run subsidiary firm that provides crypto services to institutional investors, also aims to launch a BTC ETF.
Previously, the US SEC's reasons for refusal have included the following:
- the Bitcoin market is not orderly or efficient;
- it is largely unregulated and has no market surveillance;
- it can be easily manipulated;
- the ETF will be the predominant source of influence on prices in the market;
- the valuation methodology used in ETF product proposals is not clear;
- the Bitcoin Market is not sufficiently liquid to support an ETF;
- no professional market makers can currently support a Bitcoin ETF.
As previously reported, some crypto advocates have claimed the need for ETF acceptance has become less pressing as BTC has won mainstream acceptance in many sectors. But others feel that the time is now nigh for the SEC, particularly as crypto ETFs have become almost commonplace north of the border in Canada – as well as Europe.
At the time of writing (09:22 UTC), BTC trades at USD 49,037 and is up by 3.5% in a day, trimming its weekly losses to less than 10%. The price rallied by 43% in a month and 472% in a year.
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