SEC delayed decisions on two more Bitcoin ETFs as it will take another 45 days to review proposals from Grayscale and Bitwise so let’s read more in our latest cryptocurrency news.
The SEC will take another 45 days to review BTC proposals and it has yet to approve a spot Bitcoin ETF while it did allow Bitcoin futures ETFs in the past. The US SEC delayed decisions on two Bitcoin exchange-traded fund proposals from asset management groups Grayscale and Bitwise. SEC commissioners have another 45 days to review the Bitwise BTC ETP Trust and Grayscale Bitcoin Trust proposals and approve or deny them while a third option is to delay the decision once again.
ETFs are investments that trade similarly to stocks on traditional exchanges which makes them accessible for everyday savers. Rather than featuring the individual stocks, ETFs track a group of stocks or other assets and while the agency has to approve the Bitcoin spot ETF, it did reject applications from WisdomTree and VanEck in the past six weeks. It did however allow several Bitcoin futures ETFs to start trading this year but those things are not the same. The BTC ETF will be tied right to the price of BTC on spot exchanges like Coinbase which is where you trade crypto for whatever the price is at while Bitcoin futures ETFs are tied to the derivatives markets that investors are using hedge risks.
SEC Chair Gary Gensler told firms earlier this year that BTC futures and ETFs will get much more serious consideration because they are based on different laws than the spot ETF proposals which is the Investments Company Act of 1940:
“When combined with the other federal securities laws, the ’40 Act provides significant investor protections for mutual funds and ETFs.”
A lot of people like Congressmen Tom Emmer and Darren Soto said that Bitcoin futures are riskier to the investors because they add more complexity while using the same underlying price data:
“We question why, if you are comfortable allowing trading in an ETF based on derivatives contracts, you are not equally or more comfortable allowing trading to commence in ETFs based on spot Bitcoin.”
The representative noted that Bitcoin spot ETFs are based on the asset which provides even more protection for the investors. While Emmer, Soto, and others want a Bitcoin eTF before New Year, they will have to wait.