The Status of Bitcoin ETF Approval
According to the CEO of BitGo, Mike Belshe, there is both good news and bad news regarding the approval of a spot Bitcoin ETF by the Securities and Exchange Commission (SEC). Belshe expressed enthusiasm about the progress being made in conversations between ETF applicants and the SEC, indicating that the approval process is moving forward.
On the other hand, Belshe also noted the likelihood of further rejections of ETF applications before any positive news emerges. He attributed these delays to concerns over market structure, emphasizing the SEC’s stance on the separation of exchange and custody roles, particularly as it pertains to Coinbase custody.
Belshe highlighted the issue of market structure and the necessity of separating exchanges from custody, drawing comparisons to existing market regulations in the CFTC and equities markets.
There has been growing anticipation and Bitcoin price rallies based on the assumption that the SEC is nearing approval of a Bitcoin ETF. However, today marks the end of a period during which the SEC could have potentially approved 12 ETF applications simultaneously.
Notably, the SEC’s lawsuit against Coinbase, which alleged the company’s failure to separately register its exchange, clearing house, and broker, indicates that the SEC shares Belshe’s concerns about market structure.
In discussing the comparison between Coinbase and FTX, Belshe pointed out perceived similarities in their approach to market regulation. He noted that many of the applications for Bitcoin ETFs are linked to Coinbase custody, drawing attention to the difference in approach compared to previous advocacy efforts within the cryptocurrency industry.
Steven Schoenfield, a former BlackRock managing director who is now at MarketVector Indexes, offered a timeline of three to six months for potential approval of a Bitcoin ETF. He viewed recent requests by the SEC for public comments as a positive sign of engagement rather than outright rejections.
It is anticipated that traditional finance giants like BlackRock, known for their success in obtaining ETF approvals, may play a leading role in the pursuit of a Bitcoin ETF. However, competition from firms deeply integrated into the crypto ecosystem is also expected.
Hot Take: Outlook on Bitcoin ETF Approval
The conversation about the approval of a spot Bitcoin ETF continues to fluctuate, with mixed signals coming from both potential applicants and the SEC. While there is optimism about progress being made in discussions between parties, concerns about market structure and potential rejections persist. The timeline is uncertain, with some experts predicting a window of three to six months for potential approval. The engagement of traditional finance giants and firms deeply involved in the crypto space will likely shape the outcome of this ongoing debate.
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