Bitcoin ETFs: When Will the SEC Say ‘I Do?’

While bitcoin fans anxiously await the Securities and Exchange Commission’s (SEC) determination on Blackrock’s spot bitcoin ETF proposal, it’s value delving into the larger image.

The following opinion editorial was written by Joseph Collement, General Counsel at Bitcoin.com.

Spot Bitcoin ETF: American Investors Left Waiting as SEC Procrastinates

The rise of cryptocurrency has reverberated globally, presenting a monetary revolution that many American traders really feel they’ve been side-stepped from becoming a member of. The crypto market’s fast growth, coupled with rising investor curiosity, has not but satisfied the SEC to approve a spot bitcoin ETF. Simultaneously, different nations have welcomed such ETFs, resulting in worthwhile returns for traders and solidifying their place on this burgeoning market.

Take Canada, as an illustration. The Purpose Bitcoin ETF (BTCC), authorised by the Canadian Securities Administrators in February 2021, yielded over 200% returns in its first 12 months of operation. This excellent efficiency positioned it amongst essentially the most profitable ETFs inside the Canadian market. Similarly, the 21Shares bitcoin ETP (ABTC) discovered favor with the Swiss inventory alternate in December 2021, securing sturdy returns of 162% and outpacing conventional monetary devices in the identical timeframe.

The SEC did present a glimmer of hope in 2021, greenlighting the primary “lengthy bitcoin” futures contract ETF (BITO) and its “brief bitcoin” counterpart (BITI). However, these choices lack the direct entry and price effectivity supplied by a spot Bitcoin ETF, forcing traders to grapple with the extra prices and leverage related to futures contract ETFs.

The SEC’s constant refusal to permit a spot bitcoin ETF appears contradictory, provided that its issues about market manipulation additionally apply to conventional markets. Additionally, the absence of a spot bitcoin ETF within the U.S. has pushed retail traders in the direction of unregulated exchanges, rising their susceptibility to fraud and cybersecurity threats.

So, what are the underlying causes for the SEC’s denial of a spot bitcoin ETF, past the justifications supplied of their official refusal notices?

Some speculate that identified anti-crypto U.S. regulation markers could also be placing strain on the SEC to delay a spot bitcoin ETF. After all, an ETF approval would confer a way of legitimacy to bitcoin (BTC), selling its picture as a mainstream monetary asset.

Additionally, the introduction of a spot bitcoin ETF may unintentionally lead Americans in the direction of altcoins, which the SEC categorizes as securities. It may additionally familiarize them with the idea of self-custody—a notion that, understandably, doesn’t sit effectively with the federal government.

Ultimately, the SEC’s hesitant method in the direction of cryptocurrency begins to resemble the well-known story of “the boy who cried wolf.” As extra international locations undertake cryptocurrency and reveal its value as a viable funding alternative, it’s excessive time the SEC ceases its procrastination and permits American traders to partake on this monetary revolution.

What are your ideas on the SEC’s reluctance to approve a spot bitcoin ETF within the U.S.? Share your ideas and opinions about this topic within the feedback part under.