- The U.S. Securities and Exchange Commission (SEC) currently has 4 Bitcoin ETF applications to review.
- The U.S. Banking Committee has approved the nomination of Gary Gensler as chairman of the SEC.
The SEC currently has 4 applications on file for the approval of a Bitcoin ETF. The first of them was filed in December 2020, increasing the pressure on the agency to approve the first Bitcoin ETF in the US. The latest application was filed just yesterday, Thursday, March 11, 2021, by asset management firm WisdomTree.
In the prospectus, the firm states that WisdomTree Bitcoin Trust will issue common shares listed on the Cboe BZX exchange under the ticker symbol BTCW. WisdomTree Digital Commodity Services will serve as the ETF’s sponsor and Delaware Trust Company will be the trustee. In this way, the product will provide exposure to the Bitcoin price based on the US CF Bitcoin fixed price. The company will hold Bitcoin itself, but will not “sell or buy BTC directly.”
On February 16, NYDIG also introduced a Form S-1 filing to register the NYDIG Bitcoin ETF. Its features are similar to the one proposed by WisdomTree, but this ETF would trade on the exchange NYSE Arca with a yet-to-be-announced ticker symbol. NYDIG drew attention when its S-1 went public due to the fact that it listed banking giant Morgan Stanley as an initial participant. In addition, it would be physically backed by BTC, as the document filed with the SEC indicates:
When purchasing Creation Baskets, Authorized Participants or their agents will deliver bitcoin to the Trust’s account with the Bitcoin Custodian in exchange for Creation Baskets. When redeeming Creation Baskets, Authorized Participants or their agents will receive bitcoin from the Trust through the Bitcoin Custodian.
Firm Valkyrie filed their Bitcoin ETF on Jan. 22, 2021, according to SEC filing. To gain exposure to the cryptocurrency’s price, the Valkyrie Bitcoin Trust would hold BTC to issue tradable common stock on the exchange NYSE Arca. The BTC funds would be held in custody by Coinbase if the proposal is approved.
As for the firm VanEck, it was the first to file its application for approval of a Bitcoin ETF after the cryptocurrency hit a new all-time high. Submitted in December 2020, the VanEck Bitcoin Trust would trade its shares on the Cboe BZX Exchange. The trust would give exposure to Bitcoin’s price performance, but just like WisdomTree would not buy or sell BTC directly.
The pressure mounts in favor of a Bitcoin ETF
Meanwhile, Gary Gensler taking office soon could be a massively bullish development in favor of a Bitcoin ETF. The U.S. Senate Banking Committee has approved the nomination of Gary Gensler as chair of the SEC just two days ago. The next step will be a vote on the House floor. Although the SEC has historically refused to approve this financial instrument, Gensler is known for his “pro-cryptocurrency” stance.
In addition to the change in the regulator, the current outlook in the market is different from previous years. There is a high demand from institutions to gain exposure to the cryptocurrency as evidenced by the applications presented above. In parallel, the approvals of several Bitcoin ETFs in Canada are absorbing investor interest and taking the edge off the U.S. in this area.
Co-founder of venture fund SkyBridge Capital and former Donald Trump advisor Anthony Scaramucci has been optimistic about the approval of a Bitcoin ETF due to the new SEC chairman. In an interview, Scaramucci stated:
I’m hoping that with the introduction of Gary Gensler now into the regulatory rubric, and my understanding of where he’s coming from, although I don’t know it personally, is that possibly we can get an ETF in place by the end of the year.
SEC Commissioner Hester Peirce acknowledged the high demand for approval of regulated Bitcoin-based financial products. Peirce is an advocate for the crypto industry and recently expressed concern about the “less efficient” path investors could take if the regulator continues to shut the door on them by once again denying a Bitcoin ETF.
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