BitGo CEO’s Market Structure Concerns Dampen Spot Bitcoin ETF Hopes

BitGo CEO's Market Structure Concerns Dampen Spot Bitcoin ETF Hopes


Insights on Bitcoin ETF Approval by the SEC

In a recent interview, BitGo CEO Mike Belshe shared his thoughts on the possibility of a Bitcoin ETF being approved by the U.S. Securities and Exchange Commission (SEC). As per Decrypt’s report, Belshe expressed a mix of optimism and caution, acknowledging conversations between ETF applicants and the SEC while predicting potential rejections ahead.

Belshe’s optimism comes from the ongoing talks indicating progress toward a spot Bitcoin ETF, but he also balanced it with a realistic outlook, suggesting that there might be additional obstacles on the path to approval.

Market Structure Concerns and Price Impact

Belshe highlighted the SEC’s emphasis on the separation of exchange and custody roles as a primary concern, which he believes could pose additional challenges. The anticipation for a spot Bitcoin ETF has been a driving factor in Bitcoin price rallies, and the crypto community is closely monitoring the SEC’s actions.

Belshe also mentioned the comparison between Coinbase’s approach and its bankrupt competitor FTX’s strategy, which has been viewed skeptically following FTX’s collapse.

18-Month Timeline and Institutional Obstacles

Kevin O’Leary, the chairman of O’Leary Ventures and a well-known figure from “Shark Tank,” recently projected an 18-month timeline for the SEC, during which he emphasized the necessity of a compliant crypto exchange to verify daily spot market pricing for the SEC’s approval of a spot Bitcoin ETF.

The absence of such an exchange is a significant barrier, according to O’Leary, who also identified two main obstacles for institutional investment in Bitcoin: SEC compliance and Bitcoin’s 24/7 trading nature.

Future Prospects and Impact of Approval

Despite these challenges, O’Leary noted that major institutions are interested in investing in Bitcoin, primarily attracted by its liquidity and status as a store of wealth. And with SEC Chairman Gary Gensler set to remain in his position for another 18 months, O’Leary anticipates that the approval of a spot Bitcoin ETF could coincide with the end of Gensler’s current term.

He closed by emphasizing the significant impact that SEC approval of a spot Bitcoin ETF would have on Bitcoin demand, echoing Microstrategy Chairman Michael Saylor’s expectation of a doubling in Bitcoin demand following the halving and the approval of spot Bitcoin ETFs.

Hot Take: SEC Approval’s Potential Impact

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The insights provided by BitGo CEO Mike Belshe and Kevin O’Leary shed light on the evolving landscape of Bitcoin ETF approval by the SEC, conveying a mix of optimism and caution. Despite anticipated progress and the potential for a spot Bitcoin ETF, there remain significant barriers, such as market structure concerns and the absence of a compliant crypto exchange. Amid these obstacles, there is a heightened awareness of the impact that SEC approval of a spot Bitcoin ETF could have on Bitcoin demand and institutional investment in the cryptocurrency.

BitGo CEO's Market Structure Concerns Dampen Spot Bitcoin ETF Hopes
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