Two weeks ago, the U.S. Securities and Exchange Commission (SEC) once again postponed its decision on three cryptocurrency exchange-traded fund (ETF) applications. Crypto media outlet Cointelegraph compiled a comprehensive timeline of ETF applications submitted to the SEC and reviewed the evolution of cryptocurrency ETFs over the past few years.
Regulatory Caution Prevails
An ETF is a basket of securities traded on an exchange, similar to stocks, tracking indices or assets in varying proportions. Investors closely monitor the development and regulation of cryptocurrency ETFs for two primary reasons:
- Passive Investment Tool: ETFs are seen as beneficial for bringing structure to unregulated crypto markets. A Bitcoin ETF would trade during exchange hours, making crypto investments more accessible and less risky.
- Mainstream Adoption Signal: SEC approval would expand the pool of investors able to access cryptocurrencies, marking a milestone for institutional acceptance.
Even major players in the crypto industry face regulatory hurdles. In March 2017, the SEC rejected the Winklevoss brothers' Bitcoin Trust proposal, citing insufficient oversight in Bitcoin markets. Early 2019 submissions from VanEck/SolidX and Cboe BZX were withdrawn due to the government shutdown, followed by new proposals from Bitwise and Arca.
Key Delays:
- May 14: SEC deferred Bitwise’s ETF proposal.
- May 21: VanEck/SolidX decision postponed.
- August 12: Final decision deadlines pushed to October (Bitwise: October 13; VanEck/SolidX: October 18).
- Wilshire Phoenix: Next decision due September 29.
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Shifting Government Perspectives
While the SEC’s delays suggest caution, other U.S. government sectors show growing openness to cryptocurrencies. Facebook’s Libra announcement in June 2019 sparked mainstream interest, leading to Congressional hearings. Senator Michael Crapo acknowledged the inevitability of crypto innovation, stating, "A U.S. ban would be impractical—this is a global technology."
SEC Commissioner Robert Jackson hinted that Bitcoin ETF approval hinges on market transparency. Chair Jay Clayton emphasized the lack of anti-manipulation safeguards in crypto markets. Meanwhile, Commissioner Hester Peirce criticized the SEC’s hesitance, arguing that ETFs could bolster investor protection and institutional participation.
Applicant Confidence Remains Strong
Despite uncertainty, applicants express optimism:
- VanEck’s Gabor Gurbacs: Bitcoin’s volatility won’t deter ETF prospects. "Millions already hold Bitcoin—ETFs would enhance liquidity and safety."
- Bitwise’s Hunter Horsley: SEC’s detailed deferrals signal serious consideration. "Market maturity and improved custody solutions address many SEC concerns."
- Matt Hougan: Crypto’s progress (e.g., Susquehanna’s entry, tighter arbitrage) primes the market for advisor-led investments.
Skepticism Lingers:
Arca’s Jeff Dorman warned that June’s price swings reduced approval odds, citing "non-U.S. hour volatility" as a red flag for regulators.
FAQ: Bitcoin ETF Approval
Q: Why does the SEC keep delaying Bitcoin ETF decisions?
A: The SEC cites concerns over market manipulation, custody, and liquidity—issues it deems unresolved in crypto markets.
Q: What would ETF approval mean for Bitcoin?
A: Legitimization. ETFs could attract institutional capital and simplify crypto access for mainstream investors.
Q: When is the next decision deadline?
A: October 13 (Bitwise), October 18 (VanEck/SolidX), and September 29 (Wilshire Phoenix).
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Disclaimer: This content is for informational purposes only and does not constitute investment advice.