In a frustrating move for both institutional and retail investors, the United States Securities & Exchange Commission (SEC) has ruled to delay its decision on Bitcoin ETFs–again.
Since mid-2018, Bitcoin Exchange-Traded Funds (ETFs) have been the hot topic of conversation in cryptocurrency and a focal point for the industry in encouraging institutions to invest in digital assets. As opposed to approving the assortment of ETF applications brought before it, the SEC has routinely denied or delayed such claims. As reported by EWN, the U.S. regulatory body delayed its decision on Bitcoin ETF frontrunner VanEck earlier today, and gave little reason in issuing its decision.
However, while investors may be losing patience with the SEC, one of the world’s leading authorities on ETFs claims that the commission is still in the ‘information gathering’ phase on Bitcoin, despite having multiple years worth of proposals.
David Nadig, managing director of ETF.com, told CNBC on May 20 that the SEC is still compiling a verdict on Bitcoin ETFs, and has the authority to continue delaying its creation, despite so-called deadlines,
“It is clear the SEC is still in information gathering mode. […] Technically, there are deadlines, but honestly they [SEC] can do what they want, they can kick this down the road until they are comfortable, it is clear from what we are hearing.”
While investors and crypto enthusiasts continue to beat their heads against the wall over the SEC’s glacial pace, the decision-making body appears to be in no hurry to approve the creation of a Bitcoin exchange-traded fund. It’s possible the SEC is waiting out another market cycle for cryptocurrency, content to sit on the sidelines in the event of a total BTC collapse.
Nadig, for what it’s worth, believes that a Bitcoin ETF will eventually get the greenlight, albeit at the cost of several months or more of waiting. Specifically, he told CNBC his prediction that a BTC ETF could take at least a quarter or longer to gain approval, pushing the proposed date for a decision to August or later. However, he also gave a vote of confidence for the growth of the cryptocurrency industry, and relayed that regulators would be more comfortable with a BTC ETF as the market matures.
Retail investors may not find difficulty in buying and selling cryptocurrency through the traditional exchange route, but institutional and high-capital investors have been more wary. An exchange-traded fund, with the regulatory weight of the SEC behind it, has long been looked to as the signal gun for kicking off large-scale investment. Given the Wild West nature of cryptocurrency exchanges, with hacks and other scandals becoming a regular occurrence for even the largest name players (look no further than Bitfinex and Binance), Wall Street and other institutions would prefer to have more assurance in their investment.
However, the continued delay by the SEC has led to increasing frustration by the investment base, with some analysts pointing to unfair treatment towards cryptocurrency compared to traditional markets.