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The Securities and Exchange Commission still shows no urgency to approve a Bitcoin ETF. They have extended their review of four proposed crypto funds by well over a month, citing the need for further review.
Hesitancy on a Bitcoin ETF
According to a filing from the SEC this week, the affected funds include the following.
- The Global X Bitcoin Trust,
- The Kryptoin Bitcoin ETF
- The Wisdomtree Bitcoin Trust
- The Valkyrie XBTO Bitcoin Futures Fund.
Global X approval has been delayed until November 21st, whereas the other funds have been pushed well into December. Assistant Secretary J. Matthew DeLesDernier says that the SEC needs more time before approving Nasdaq’s filing to trade Valkyrie Futures.
The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and any comments.
This quashes the hopes of many who expected a US ETF to receive approval this month. Bloomberg Analyst Eric Balchunas and Bloomberg Strategist Mike McGlone both predicted ETF approvals by the end of October.
An ETF approval would have helped late investors receive cryptocurrency exposure at a crucial time. But, as predicted, Bitcoin is already leading a market recovery this October, which many will want a piece of.
Better Chances at a Futures ETF?
Gary Gensler– chairman of the SEC– says that while he supports Bitcoin ETFs, investor protection concerns bar him from approving one. He holds the same thoughts regarding the crypto space more broadly. While he finds the technology intriguing, he does believe that most cryptocurrencies are securities. He’s even gone as far as labeling stablecoins as “poker chips.”
For this reason, Gensler supports the approval of a Bitcoin Futures ETF, if any at all. A futures ETF could be traded on the Chicago Mercantile Exchange under the 1940 Investment company act. He says this would offer investors in Bitcoin some protection from market manipulation, which is commonplace.
However, among the ETFs recently rejected, Valkyrie was a Futures ETF, meaning that the SEC still isn’t entirely comfortable with it. In addition, the regulatory body continued to decline and delay similar applications from other groups, such as VanEck, in June.
Meanwhile, many have criticized the SEC’s lateness in approving a Bitcoin ETF. Among them is Hester Peirce (aka “crypto mom”)– an SEC commissioner who highly supports crypto. However, in her opinion, the rationale for not approving one “seems to grow weaker” with each passing day.