The SEC has been rejecting the simplest products like a Bitcoin ETF, pushing demand for crypto offshore and unregulated players. Richard Gardener, CEO of tech infrastructure firm Modulus, believes futures ETFs have long been seen as more palatable for regulators and that the decision over a spot ETF is a matter of when not if. Bloomberg analysts have predicted that the chances of approval for an Ether futures-derived ETF are over 90%, with nearly a dozen institutions lined up for approval.In light of Grayscale’s recent legal victory and the wave of renewed applications, ETF analysts at Bloomberg have raised their expected approval chances for a spot Bitcoin ETF to 75% from 65%. The SEC has delayed its decision on all seven applicants.The SEC has rejected spot Bitcoin ETFs in the past due to the Bitcoin market not being big or mature enough to sustain ETF market demand, the price volatility and inadequate level of trading surveillance. The entrance of BlackRock has increased the chances of a spot ETF being approved.A futures ETF is based on futures contracts rather than the digital asset itself, which is an important distinction. The futures markets are already heavily regulated to prevent market manipulation, thus making it easier for the SEC to approve such ETFs. The SEC is mainly concerned about the robustness of the trading venues and the ability of the Bitcoin market to handle the volume that would be brought in via the introduction of a spot ETF. The ProShares Bitcoin ETF disapproval dated back to 2018 clarifies this very point. The regulator oversees futures exchanges like the CME and the Cboe, and any futures ETFs will be restricted to only trading on those regulated venues. Whereas there are no SEC-regulated spot exchanges.However, not everyone agrees with the SEC’s assumptions about the vulnerabilities of the spot crypto ETF market. James Koutoulas, the founder of a futures-focused hedge fund Typhon, believes that the crypto futures are far inferior to the spot in terms of tracking error and that the concept that a U.S. regulator can provide adequate ‘surveillance’ against market manipulation on a global 12-figure market is delusional. He added that by continuing to reject the simplest products like a BTC ETF, the SEC is passing the buck to the CFTC rather than retaining accountability.
This News Article was automatically generated by Bob the Bot (AI)
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | North America |
| Countries | |
| Sentiment | negative |
| Relevance Score | 8 |
| People | John Glover, Larry Fink, James Koutoulas |
| Companies | Galaxy Digital, ARK Invest, VanEck, BlackRock, Fidelity Digital Assets, WisdomTree, Xapo, Fidelity, Chicago Mercantile Exchange, 21Shares, GlobalX, Bitfinex., BNY Mellon, NYSE Arca, Valkyrie Investments, Swiss-based ETF provider, Bitwise, Chicago Board Options Exchange, Cboe BZX Exchange, Invesco Capital Management, Fidelity Service Company, Coinbase, CFTC |
| Currencies | US Dollar, GoCryptoMe, bny mellon, Ethereum, Bitcoin, grayscale. |
| Securities | None |
