Why The U.S. SEC Should Approve Its First Bitcoin ETF
The US SEC should approve its first Bitcoin ETF products, a move that can enable more mainstream investors to get exposure to the digital asset.
The entire Bitcoin and cryptocurrency ecosystem is changing as more people are becoming aware of the budding potential of the crypto space.
There have been hurdles in Bitcoin's quest to go mainstream in the past year, but institutional investors that were once indecisive about owning the asset are now beginning to back the premier digital currency.
Beginning with the unrelenting embrace of Bitcoin by hedge funds such as Grayscale, other publicly listed companies also took up positions with the cryptocurrency. Among the corporations supporting Bitcoin are PayPal, MicroStrategy, Square, and Ruffer Investment Company, to name a few.
The support for BTC by these companies - either through direct purchase or by supporting its purchase on their platform as is the case of Paypal has arguably increased the publicity around the cryptocurrency. The mainstream media is gradually becoming more amused by the potentials of the coin, as its ongoing bullish run has steered its price down to a new all-time high (ATH) of $50,000.
Government Can Support Increased Corporate Participation Through ETF
The United States government through the Securities and Exchange Commission (SEC) has maintained more of a dual-faced regulatory approach when it comes to general Bitcoin and cryptocurrency oversight. While allowing the operations of some key crypto and blockchain-based companies, the agency has maintained an outright rebuff for specialized products including Bitcoin Exchange Traded Funds (ETF).
An Exchange Traded Fund is an investment product that trades on the stock exchange and follows the trading standards of a public bourse. With ETFs, conservative investors can gain exposure to Bitcoin, but under more structured regulatory provisions. This dispels the fear of financial insecurity that comes with having direct exposure to the asset.
Over time, however, the SEC has refused to grant approval for numerous applications that have filed for an ETF product in the United States. Bitwise, VanEck, SolidX, and other entities who have registered for Bitcoin ETFs in the past have been met with the shock of their proposals being rejected, with no hope in sight even in 2021.
Seeing the current trend in the crypto space with top US firms, the latest of which is electric vehicle maker Tesla Inc. who made a $1.5 billion purchase of Bitcoin, the time might be nigh for the SEC to reconsider its position on BTC ETFs. This move can be the last link in drawing more Wall Street investors into the Bitcoin space.
NYDIG In Line To Retest The SEC’s Resolve
Following the trend and yielding to market demands have prompted both Canadian and Australian regulators to approve their Bitcoin ETF products. NYDIG, Stone Ridge Asset Management’s Bitcoin spin-off firm, is, however, testing the resolve of the SEC with its latest filing for a Bitcoin ETF product.
Listing investment banking firm Morgan Stanley as the initial authorized participant in the ETF, NYDIG is hoping that 2021 will be the pivotal year where the US match up with its peers by allowing new Bitcoin investment solutions.
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