Does bitcoin need a spot bitcoin ETF? Probably not. The US might need one or two, though. Other countries have full proof of concepts already working and absorbing capital. None of those products shows any of the problems the SEC thinks a spot bitcoin ETF would bring. Plus, there are already future bitcoin ETFs functioning without a problem in the US. What’s the delay with the spot bitcoin ETF really about?
Several companies are constantly applying to be the first to offer the now mythical spot bitcoin ETF. The SEC keeps rejecting their proposals left and right. Is there a reason behind all of this? The Chamber of Digital Commerce explained it and went for Chairman Gensler’s throat, and that’s the first thing Bitcoinist covered. Their report contained more useful information, though. A series of reasons why the SEC needs to approve a spot bitcoin ETF before it’s too late.
The US Needs A Spot Bitcoin ETF
In “The Crypto Conundrum: Why Won’t the SEC Approve a Bitcoin ETF?,” the Chamber of Digital Commerce puts forth several points that are hard to deny. However, the document also reads like a plea and then as a threat. It’s a weird report, but that doesn’t mean that the points it contains don’t make sense.
- “The SEC cannot deny the significant market demand for bitcoin (including, and notably, at the institutional level), yet an investor seeking to invest directly in bitcoin (absent a Bitcoin ETF) must do so without the umbrella of federal securities regulatory protection that has developed over the past 80 years.”
This directly contradicts Chairman Gensler’s argument that the SEC doesn’t approve a spot bitcoin ETF to protect the unsophisticated public. However, what the Chamber of Digital Commerce isn’t telling you is that to self-custody your bitcoin is easy if you accept the responsibility. Bitcoin represents the first time that retail investors have access to property rights.
- “The SEC’s official justifications for denying the applications remain the same as those offered in its first denials, despite a significant maturation and institutionalization of the market, proofs of concept offered by similar products operating abroad, and robust and rigorous research undertaken by market participants showing the SEC’s stated concerns to be unfounded.”
The Winklevoss twins first applied for a spot Bitcoin ETF in 2013. Since then, several institutions with tradition, staff, and an infinite budget have tried and failed. According to the Chamber of Digital Commerce, if institutions perceive that their applications will fail no matter what they do, they’ll stop trying. And that will stifle innovation.
BTC price chart for 09/15/2022 on FX | Source: BTC/USD on TradingView.com
Bitcoin’s Price Discovery And The CME
According to The Chamber, “the SEC has imposed on the industry an unprecedented requirement unique only to bitcoin, which requires that an applicant prove that price discovery on bitcoin occurs on the CME.” The organization said that’s what they would need to approve a spot Bitcoin ETF. Something they wouldn’t ask from more traditional products. Well, as it turns out…
Read Full Article…