SEC Commissioner Peirce Believes SEC Rules May Kill Bitcoin ETF Chances This Year
Hester Peirce, the commissioner of the U. S. Securities and Exchange Commission (SEC) has affirmed that the chances that we may see the long-awaited Bitcoin exchange-traded fund (ETF) this year are very slim.
Known as the “Crypto Mom” because she supports she supports Bitcoin a lot, Peirce is a minority in the SEC, as most of the commissioners are not very keen on the Bitcoin ETF. She blamed “arcane rules” as the reason for the delay of the ETF.
The institution is known for leaning more towards a conservative vision of the market and Hester Peirce is basically alone lobbyist for Bitcoin in there. She often has affirmed that she is trying to convince her colleagues but her efforts are not being successful at the moment.
Last year, she pushed hard for the VanEck Bitcoin ETF, but the decision ended up delayed, which has prompted her to accuse the SEC of being “impulsive in running away” in social media.
The Crypto Market Is Waiting For The ETF
A lot of the investors in the industry are waiting for the Bitcoin ETF, as they consider that it will be the major trigger that will finally usher a new bull run, which may take the prices up. The ETF would be a very easy way for investors to get exposure to Bitcoin markets in a safe way and more institutional and traditional investors would be interested in the market then.
Last year, the SEC decided to reject several applications for the ETF, including one from the Winklevoss Twins, which own the Gemini crypto exchange. The main concern of the SEC is that the market is too prone to manipulation and it lacks maturity so far.
However, Peirce’s argument is that the investors are smart enough to make up their own minds on the risks and that they do not need the SEC to babysit them.
What Will It Take For The Bitcoin ETF To Be Approved?
At the moment, the best shot of the industry is the VanEck Bitcoin ETF. The main positive aspect of the ETF is that it derives its price from over the counter (OTC) markets. Some of the prior attempts derived their price from the futures market. The difference here is that OTC markets are bigger and that they are a lot more liquid, which is good.
The ETF would also be physically settled and actual Bitcoin would be bought in order to back the product. Unfortunately, because of the government shutdown which happened in January, the company retired the application and now it will have to wait for the SEC again.
According to Jay Clayton, the chair of the SEC, the main concerns of the SEC are linked to the storage of the cryptos, theft and market manipulation. The chairman is not really convinced that the Bitcoin market is very secure yet. Because of this, he is not so comfortable with the idea of the ETF while the market does solve custody, theft and manipulation problems.
The CEO of VanEck, Jan van Eck, believes in the potential of his product. He believes that his company just need to demonstrate in a very clear way that the ETF is safe.
According to some experts, the main doubt is not even whether the Bitcoin ETF will be accepted one day. It is almost certain that it will, but the main question is when will this happen.