- An avalanche of Bitcoin ETF (exchange-traded fund) applications has flooded the SEC in a bid to gain approval.
- The applications are coming at a time that seems just right for Bitcoin ETFs due to a change in the SEC’s leadership and a massive increase in the number of Bitcoin users.
- In 2019, a handful of firms, such as Bitwise Digital Assets and Van Eck, attempted to gain approval from the Securities and
- Exchange Commission to float Bitcoin ETFs but were all rejected.
- However, Canada has approved the first Bitcoin ETF in North America, which has achieved resounding success.
Bitcoin ETFs could be coming to America after numerous false starts since 2019. The leadership of the SEC had always posed a stumbling block to the launching of Bitcoin ETFs in the US.
All that could change as a wave of applications have hit the desks of the Securities and Exchange Commission, seeking approval at what appears to be the perfect time to strike.
Bitcoin ETFs (exchange-traded funds) are instruments that mimic the price of the cryptocurrency and allow users to bypass the complex issues of storage and security associated with trading Bitcoin.
Avalanche Of Bitcoin ETFs Upon Us
Canada’s decision to approve the first Bitcoin ETF in North America has given a boost to the American firms seeking to float their own ETFs.
After a series of harsh rejections by the SEC, it seems the coast is now clear for the launching of Bitcoin ETFs in America, with Bitwise refiling for an ETF after an earlier rejection in 2019. Other companies that have recently filed for Bitcoin EFTs include Morgan Stanley (NYSE:MS), WisdomTree, and SkyBridge Capital.
Such applicants are now confident of getting approval because of a change in the leadership of the SEC. Jay Clayton, former head of the SEC, was not a fan of cryptocurrencies; Jake Chervinsky, a general counsel at Compound Finance, once tweeted that it was “reasonable to assume that Jay Clayton’s SEC would never approve a Bitcoin ETF.”
After Clayton stepped down from the SEC in December 2020, Gary Gensler stepped in to replace him, offering a ray of hope to the cryptocurrency industry. Marie Tatibouet, CMO at Gate.io, commented that Gensler as “a Blockchain researcher and professor” may look favorably on the influx of Bitcoin ETFs.
Similarly, huge corporations like Tesla (NASDAQ:TSLA) and MicroStrategy investing massively in Bitcoin indicates that it is an increasingly credible asset class. The large numbers of Bitcoin users in 2021 and Canada’s successful implementation of Bitcoin ETFs have the potential to sway the minds of the SEC to grant approval.
On the Flipside
- Following Canada’s approval of Bitcoin ETFs, Brazil became the second country to officially approve a Bitcoin ETF.
- The Brazil Securities and Exchange Commission (CVM) has approved blockchain investment firm QR Capital’s bitcoin ETF.
- The fund will trade on the Sao Paulo-based B3 exchange under the ticker QBTC11, QR capital.
Why The Fuss About Bitcoin ETFs?
Bitcoin ETFs are exchange-traded funds that allow users to trade the value of Bitcoin on traditional market exchanges instead of the typical crypto exchanges.
The advantage of this is that it offers investors the convenience of seamlessly trading Bitcoin without the risks associated with holding the cryptocurrency or the hassle of learning how the underlying technology works.
It also has the benefit of diversification to mitigate risks. If approved by the SEC in the US, ETFs could have a positive impact on the cryptocurrency and increase the number of Bitcoin investors in America.
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