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- At the moment, SEC has only approved bitcoin ETFs based on bitcoin futures — and not bitcoin itself.
- Top Bloomberg analysts have made a 2023 prediction that the regulatory agency will approve the first Bitcoin ETF.
Bloomberg Exchange Traded Fund (EFT) analysts Eric Balchunas and James Seyffarth said that a proposed rule change with the United States Securities and Exchange Commission (SEC) could be the catalyst for the regulatory body approving a spot Bitcoin ETF in mid-2023.
Balchunas said in a tweet Thursday that crypto platforms could fall under the SEC’s regulatory framework if the committee approves an amendment to revise the definition of “exchange” proposed in January. The rule change would amend the Exchange Act to include platforms “that can be used to trade securities of any type” — apparently including cryptocurrencies — making their investment instruments more popular with regulators.
New note out on why we think spot bitcoin ETFs will get approved in early Summer 2023. The SEC is proposing to expand the definition of "exchange" which would bring crypto platforms under SEC reg. After that (which could take a year) look for ETFs to get green light via @JSeyff pic.twitter.com/TtFgFXrJ8h
— Eric Balchunas (@EricBalchunas) March 24, 2022
Once crypto exchanges are compliant, the SEC’s primary reason for denying spot Bitcoin ETFs would no longer be valid, likely clearing the way for approval,
The SEC could approve spot cryptocurrency ETFs, including those exchanges exposed to bitcoin (BTC), under a revised definition of “exchange,” which could be finalized between November 2022 and May 2023, according to Balchunas and Seiffart. Although some bitcoin futures-related investment vehicles were approved in 2021, regulators have so far rejected all rule changes that would allow spot BTC ETFs to be listed on exchanges.
Many U.S. lawmakers and industry leaders have objected to the SEC’s apparent reluctance to approve a spot Bitcoin ETF. In November, House members Tom Emmer and Darren Soto sent a letter to SEC Chairman Gary Gensler, questioning the regulator’s refusal to list a bitcoin ETF. Bitfury CEO and former acting Comptroller of the Currency Brian Brooks also said at a hearing in December that the U.S. is “certainly” behind in approving crypto-ETFs.
Also read: 95% of U.S investors support the Grayscale Bitcoin spot ETF application as SEC delays decision
Earlier, Ric Edelman, founder of advisory firm Edelman Financial Engines, said he believes that SEC will approve the launch of a bitcoin ETF in the next two years as the cryptocurrency market matures.
Hopefully it will happen, if not in the next twelve months, then in 2023. The fact is, the SEC is running out of excuses to say no,
He explained that the maturity of the cryptocurrency market and its rapid development should remove the regulator’s doubts about approving applications to launch Bitcoin ETFs. SEC Chairman Gary Gensler motivated the agency’s position by the fact that it will not be able to sufficiently control this investment product. But in that case, the SEC can’t fully control gold and oil, Edelman said.
The founder of Edelman Financial Engines added that investors that curious about cryptocurrency ETFs and unable to access them within the U.S. “go” to other countries where they are allowed. What’s worse, people are forced to use unregulated platforms, running the risk of losing money.
Edelman cited this as a good reason why the SEC should approve bitcoin ETFs, which would be a step toward protecting consumer rights. He said about a quarter of Americans now own BTC, and given its growing popularity, a third of U.S. citizens will own it by the end of the year.
“There are a lot of people investing in bitcoin, they just don’t advertise their investments. You can compare them to teenagers buying beer,” Edelman joked. Bitwise Investment Director Matthew Hougan agreed with Edelman that industry players’ efforts to address SEC concerns about cryptocurrencies this year could “bear fruit.”
Indeed, cryptocurrency companies have expressed a willingness to work with regulators and help develop rules to oversee digital assets. Hogan believes that the cryptocurrency market has matured, so it’s time to overcome the SEC’s resistance to launching cryptocurrency ETFs. Earlier, Hogan said that bitcoin futures ETFs are not suitable for long-term investors because of the additional costs.
