What is the ramifications of a Bitcoin ETF that is delayed?

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The US Securities and Exchange Commission has yet to formally sanction Bitcoin ETFs, having previously just acknowledged VanEck’s filing for a $5 trillion ETF. The federal agency is grappling with many ETFs that are pending clearance, but the SEC’s denial of ten such Funds attracted fire from Commissioner Hester Peirce once more.

Peirce, also known as ‘Crypto Mom,’ noted that the approval of Bitcoin ETFs has been long overdue.

Meanwhile, two of the largest cryptocurrencies Bitcoin and Ether have performed exceptionally well with a price hike of 823.6% and 1266.3%, respectively. Among growing retail interest, which saw the global crypto population cross 100 million users, corporates are showing increasing interest too. For example, payments network giant Visa decided to settle transactions in USDC over the Ethereum blockchain.

As interest in crypto assets increases, new Bitcoin ETF applications can make their way back to the Commission. Peirce revealed that while the SEC reviews these applications “against the facts and conditions,” people look at “past rejections and try and find out what it is they need to address.”

Bitcoin’s price success, according to Peirce, is not the SEC’s “job.” She claims that the “bigger driver” is that merchants can now access Bitcoin and Ether through “a number of avenues” or “other ways.” She continued, saying:

And I guess the question will be at what point do we start to say: “Wait a minute, retail investors are accessing this stuff in other ways. Would it be better for us just to allow them to access it through these more standard exchange-traded products that are more familiar?”

However, the Brazilian Securities and Exchange Commission recently approved the first Bitcoin ETF in the Latin American region. Following the announcement of three Bitcoin ETFs in Canada earlier this year, this regulatory approval represented the second time a conventional exchange agreed to list a Bitcoin ETF.

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Peirce said that she could not forecast the Commission’s potential position on ETFs because “the norm” that the SEC has applied “is different” from what has been applied “to other categories of goods.” She did, however, mention that “a new chairman” may “rethink the approach” to approving exchange-traded securities.

Although many in the crypto field are looking forwards to the appointment of crypto-friendly Gary Gensler, Peirce said that it is “important to balance expectations:”

“I think it’s really wonderful to have someone coming in who knows the industry quite well and has spent time interacting with people who are actually building stuff. He’s going to have a very busy agenda—much of which will have nothing to do with crypto. So it is important to manage expectations a bit. But I do think that he is someone who is sympathetic to the call for regulatory clarity.”

 

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