Is a bitcoin exchange traded fund (ETF) inevitable? According to SEC Commissioner Robert J. Jackson Jr.’s latest comments, it could be. In a recent interview, Jackson sent a positive signal that a Bitcoin ETF will eventually be approved. Does it mean we will see an SEC-approved Bitcoin ETF in 2019?
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An Inch Closer to a Bitcoin ETF
SEC Commissioner Jackson’s latest remarks were part of an interview with political publication Congressional Quarterly that was set to go public on February 11th. However, snippets of the original interview were leaked on Twitter by Andrew Hinkes – General Counsel at investment advisory firm Athena Blockchain.
Bitsonline has not personally verified the legitimacy of the leaked documents. The commission’s lone democrat, Jackson believes that it’s only a matter of time before a Bitcoin ETF seeker will meet the standards set out by the body to see its application approved:
“Eventually, do I think someone will satisfy the standards that we’ve laid out there? I hope so, yes, and I think so.”
To date, the securities regulator has rejected all Bitcoin ETF applications due to concerns specifically surrounding market manipulation, as well as liquidity issues.
Jackson Raises Hopes of SEC Approval
Highlighting the magnitude of a Bitcoin ETF approval, Jackson stated:
“Getting the stamp of approval from the deepest and most liquid capital markets in the world is hard, and it should be. Once we make it available to everyday mom and pop investors, we are taking risks that Americans can get hurt.”
Citing these concerns, Jackson recalled the disapproval of the Winklevoss twins’ Bitcoin ETF product last year. The rejection was based on the application’s inability to demonstrate the capacity to avoid fraud and manipulation in the underlying asset.
At the time, the SEC commissioners voted down the proposal 3-1, with Commissioner Hester M. Peirce the only voice lending support towards the Winklevoss filing.
Commissioner Pierce strongly voiced her disagreement stating that the decision undermined innovation, and in fact, would cause rather than resolve many of the concerns the body has. (For the uninitiated, a Bitcoin ETF is an investment vehicle that will allow investors to buy the digital currency without actually owning it.)
A Clean Sweep
However, things look more promising for ETF seekers as there seems to be an attitudinal shift within the SEC. In September last year, the SEC appointed a new commissioner Elad Roisman who is said to be pro-crypto.
Therefore, in the current scenario, out of the five commissioners, three are considered crypto supporters–Elad Roisman, Hester Peirce, and the latest being Robert Jackson. As such, the probability of a Bitcoin ETF getting a go-ahead has increased significantly, yet SEC chairman Jay Clayton appears to remain reluctant.
Last month, crypto startup Bitwise Asset Management filed its application with the SEC to launch a Bitcoin ETF. At the time, Bitwise proclaimed that its proposal differs from previous applications as it carefully addressed all the regulatory concerns.
Apart from that, Cboe, owner of one of the world’s largest options markets, resubmitted its application, in collaboration with VanEck and SolidX to launch a Bitcoin ETF.
While many are racing to become the first to launch a regulated crypto product in the U.S. market, Andreas Antonopoulos believes that the idea of a Bitcoin ETF is awful. Antonopoulos is of the opinion that the entry of institutional investors will result in heavy price manipulation in the cryptocurrency market.
Will the SEC approve the next Bitcoin ETF application? Share your views in the comments section below.
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