SEC Signals ETF Openness Disappointing Bitcoin Backers

The Securities and Exchange Commissioner of the United States gave the nod of assent to the Bitcoin ETF, much to the disappointment of Bitcoin backers. Gary Gensler, the US SEC, addressed the crypto issue and said that the ETF would enable the investors to focus on Bitcoin futures. Most cryptocurrency investors invest substantial money on the margin to conduct trading and investment, which is not favorable for crypto enthusiasts. The Exchange Traded Fund differs from Bitcoin-backed fund and is a welcome change for crypto enthusiasts.

According to Mark Sigel, the head of digital asset research in VanEck, the funds of Bitcoin futures are inferior as they are too complex and often known to undermine the market price of Bitcoin. In Sigel’s opinion, the SEC seems to influence individual investors to make investments in cryptocurrency products of high risk and of low quality. Instead of making such a move, the investors should consider investing their capital in an ETF wrapper that provides the necessary market exposure to a wide range of assets, quite a few of which are more illiquid and speculative than Bitcoin.

The regulators of the United States are yet to give their approval to cryptocurrency ETF even though quite a few companies are seeking to launch Exchange Traded Funds. As per the tally reports of Bloomberg Intelligence, nine firms have filed registrations for the authorization of ETFs in 2020.

Financial policymakers are worried how ETFs handle the price volatility of Bitcoin. Gary Gensler addressed their concerns of Bitcoin price manipulation and fraudulence by pointing out the immense potential value of blockchain technology and crypto assets like Bitcoin. In the meantime, the financial authority of Canada has approved the launch of multiple Bitcoin ETFs.