So far, the crypto market has waited anxiously for a first bitcoin exchange-traded fund, and as it stands, the wait is set to continue even as regulators maintain ‘concerns’ must be addressed.
Encouragingly, however, one of the commissioners at the U.S. Securities and Exchange Commission (SEC), Robert J. Jackson Jr., has said that the regulator will eventually give the nod to a bitcoin ETF.
In an interview with Roll Call, which the news source published on Wednesday this week, Jackson said that the future holds promise for such a product.
He opined that “someone [eventually] will satisfy the standards” that SEC has laid out there, which would see the regulator allow for the listing of these ETFs on the stock market.
Note that the SEC has so far rejected ten bitcoin ETF proposals filed by various firms over the last couple of years.
In July 2018, the agency threw out, (for the second time) a proposed rule change by Gemini’s Winklevoss twins. The proposal sought to list an exchange-traded fund on the BZX Exchange.
Then in August, the securities regulator turned down another seven applications filed by Proshares, Direxion, and GraniteShares.
It was hardly a consolation when the SEC announced just a day later, that it would review the rejected proposals, setting an October deadline for comments from the public.
The regulator also postponed a decision on a highly anticipated VanEck/SolidX ETF to February 27. However, the firm pulled and resubmitted the proposal early this month, which basically means that there is no imminent decision.
SEC Chairman Jay Clayton has as recently as last November been quoted as saying that he doesn’t see there being a pathway towards approval for a cryptocurrency ETF unless the industry addressed concerns related to market manipulation.
Commenting on the rejection of the Winklevoss’ proposal, Jackson told Roll Call that it hadn’t been “a difficult case.” He noted that potential manipulation posed an “enormous” risk to investors and that the crypto market continues to struggle with liquidity problems.
The SEC commissioner has however noted some positive moves; he told the government-focused news outlet. According to him, the question now is “whether or not” the regulator will find an ETF proposal that “really protects investors.”
Jackson’s sentiment that an ETF is possible adds to the voice of another SEC commissioner that has believed a crypto ETF is a possibility.
Hester Peirce, who disagreed with the decision to reject the Winklevoss proposal, said that the SEC erred and exceeded its authority. Her formal dissent urged that the securities regulator should have allowed BZX to list the ETF as it met requirements set out in the Securities Act of 1934.
Following Jackson’s comments, Peirce said that she would like to work with him in an effort “to open the doors to innovation.”
There is no breakthrough yet for a Bitcoin exchange-traded fund, but with positive vibes from within the SEC, maybe it won’t be long before the market sees one listed for trading.
Bitwise Asset Management filed for an ETF approval in January and early this month, the Cboe re-filed the VanEck application.
Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.