Get the weekly summary of crypto market analysis, news, and forecasts! This Week’s Summary The crypto market ends the week at a total market capitalization of $1,165 trillion. Bitcoin is up by over 2% after a rollercoaster of a week. Ethereum decreased by almost 1% over the past seven days. XRP gained more than 15% in value this week. Almost all altcoins are trading in the green, with very few exceptions. The DeFi sector decreased the total value of protocols…
SEC Chairman Reaffirms Support for Futures-Backed Bitcoin ETFs
Cryptocurrency investors continue to push for approval for exchange-traded funds (ETFs). The battle has been raging on for years, but there are positive signs of progress.
The latest sign came from Gary Gensler, the Chairman of the Securities and Exchange Commission (SEC)
Slow and Steady for the SEC
Earlier this week, Gensler prepared comments for a Financial Times conference. In his remarks, the SEC chairman said he would support futures-backed Bitcoin ETFs. These ETFs have backing from Bitcoin futures instead of Bitcoin itself. While they might not be as popular as Bitcoin ETFs, they will still offer access to the crypto market.
Speaking at the conference, Gensler explained that the SEC is still reviewing ETF applications. The agency has been wary of approving applications for years now. While many believed that this administration would swiftly support them, that hasn’t been the case.
The SEC’s history with crypto ETFs isn’t so pretty. Several companies have applied with the agency to launch their funds. Also, they offer investors access to the market over the years. But, the agency has refused them.
The SEC has primarily cited the Investments Company Act of 1940 as its reason. This Act seeks to ensure investor protection. The SEC claims that existing applications don’t protect crypto investors enough. So, it has rejected most of them. Some applicants have also withdrawn their applications.
Optimism Grows Over ETF Approvals
Despite the optics, there is still hope that crypto ETFs will get their approval. A commodity strategist at Bloomberg Intelligence, Mike McGlone, said that Bitcoin ETF approvals could come in October.
In an interview, McGlone explained that Canada remains a competitive leader in the Bitcoin ETF space. Furthermore, Canada has already approved several ETFs this year. Additionally, McGlone pointed out that more capital flows from the United States to Canada to invest in these crypto products.
As McGlone added, the U.S. government will be looking to catch up soon. When answering a question about a potential time frame, he said ETFs’ approval in the United States could happen before November. However, McGlone added that the SEC would most likely approve a futures-based ETF first. This will offer a broader window of legitimization for the industry and pave the way for more ETFs to follow.
Of course, it is worth noting that approval for crypto ETFs doesn’t necessarily mean that the U.S. government will legitimize crypto. But this will mark a step in the right direction nonetheless.