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The Securities and Exchange Commission has until Nov. 14 to give a thumbs up or thumbs down to the VanEck Bitcoin ETF, the first exchange-traded fund in a long line of “spot” bitcoin ETFs that have applications in front of the regulator.
The SEC has delayed a decision on the application twice before, but now that a maximum 240-day review period is over, they must decide.
The ETF and bitcoin community are not optimistic.
“I think there is literally zero chance of passage in the next three years,” Dave Nadig, director of research at ETF Trends, told me.
What happened to all the crypto optimism?
That pessimism is born out of two developments:
1) Key regulators, particularly SEC Chair Gary Gensler, have indicated they are reluctant to expand crypto offerings, particularly a “spot” bitcoin ETF, unless there is legislation clearly defining which regulatory agencies have control over the various crypto spaces, such as crypto exchanges; and
2) Legislation tucked into the recent infrastructure bill will place onerous reporting requirements on crypto.
Crypto investors got their first splash of cold water earlier this year when Gensler spoke at the Aspen Security Forum on Aug. 3, where he noted the need for more investor protection around the crypto space. He said, “Given these important protections, I look forward to the staff’s review of such filings, particularly if those are limited to these CME-traded bitcoin futures.”
Sure enough, Gensler soon approved the first bitcoin futures-based ETF, the ProShares Bitcoin Strategy ETF, which began trading on Oct.19. A second bitcoin futures ETF, the Valkyrie Bitcoin Strategy ETF, began trading on Oct. 22.
But the futures market operates in a “regulated” space. Bitcoin and bitcoin exchanges do not. Gensler has signaled his reluctance to approve securities that are not operating in a “regulated” space.
No short bitcoin futures ETFs, either
While the SEC approved bitcoin futures ETFs,…
