The crypto market will have to wait at least another 45 days for a U.S. bitcoin ETF. The United States Securities and Exchange Commission (SEC) has delayed an ETF application from VanEck.
This can be read in a document from the SEC dated August 24.
No spot bitcoin ETF yet
There are already ETFs on the U.S. market, but they only contain futures and options contracts. VanEck wants to offer the first ETF that uses real bitcoin, and then also accurately tracks the bitcoin price.
It appears that the SEC wants more time to decide where to approve the spot ETF application, but previous statements do not indicate that a favorable outcome is likely.
Previous rejections bitcoin ETF
The financial watchdog has rejected several spot ETF applications in the past, including a VanEck bitcoin spot ETF application last year. VanEck filed this new bitcoin spot ETF application in July, about eight months after that rejected application.
Market manipulation, bitcoin and protecting consumers
Suppose the bitcoin ETF is approved, it will be seen as confirmation that the image of bitcoin is getting better. A bitcoin ETF will provide more legitimacy and will hopefully address some of the SEC’s concerns as well.
THE SEC has stressed time and again that they are concerned about market manipulation and the lack of consumer protection in the crypto market. That hasn’t stopped VanEck, one of the oldest ETF providers, from launching a bitcoin ETF multiple times.
In this filing, the SEC writes:
“The Commission deems it appropriate to designate an extended period of time to take action on the proposed rule change in order to allow sufficient time to consider the proposed rule change and the issues raised therein.”
A derivative of a derivative of bitcoin
The SEC did approve bitcoin futures ETFs in the past. A future is a financial instrument to bet on the bitcoin price, and an ETF is in turn a derivative of that. So these products are a few steps away from real bitcoins. VanEck itself launched a bitcoin futures ETF in October 2021.
Pierce is for bitcoin ETF
Funnily enough, Hester Pierce, commissioner at the SEC, is in favor of a bitcoin spot ETF. She called for “stopping the categorical refusal of spot crypto exchange-traded products.”
This call was featured in the remarks on – hold on – “Regulatory Transparency Project Conference on Regulating the New Crypto Ecosystem: Necessary Regulation or Crippling Future Innovation?” which was held on June 14 published.
The SEC has been refusing crypto spot ETFs for months, while futures ETFs are allowed to trade. According to the Commissioner, “The Commission’s resistance to a spot bitcoin Exchange Traded Product is becoming almost legendary.”
Grayscale sues SEC
The lack of approval for a bitcoin spot ETF has led to crazy situations. Grayscale saw its request to convert the Grayscale Bitcoin Trust into a spot ETF rejected by the SEC. In response, the company has sued the agency and the trial is expected sometime late next year.
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