SEC Still Stalling On Crypto ETFs But UK’s First Bitcoin ETP Looms
Crypto ETFs in the US are piling up at the Securities and Exchange Commission (SEC) with multiple submissions awaiting approval. The reason the financial watchdog is showing hesitance towards launching ETFs has not been stated explicitly, but it could be concerned with how to protect investors, given the volatile nature of the crypto market, and the lack of surveillance on crypto exchanges.
Just last week, Gary Gensler, Chair of the SEC, talked about financial services in a House Committee, where he stated that the market is full of gaps in investor protection. He also said that no cryptocurrency exchange in the US had registered its official service offerings with the commission.
Possibility of Approving a Crypto ETF
Currently, there are around 12 Bitcoin ETF applications awaiting approval from the SEC. Some of the firms that have made submissions include VanEck, WisdomTree, Fidelity, Wilshire Phoenix, and First Trust SkyBridge.
Applications for Ethereum ETFs are also awaiting approval, although they are not as numerous as the Bitcoin ETF applications. VanEck and WisdomTree are the only firms to apply for an Ethereum ETF with the commission.
No one can tell whether the SEC will approve any of the applications. The commission has previously rejected multiple Bitcoin ETFs and, notably, delayed the approval decision of the VanEck Bitcoin ETF until June.
Many were optimistic about Gensler’s appointment as the commission chair, given his experience in blockchain and the crypto sector. However, his actions to date are not what the crypto community was hoping for.
Crypto ETFs: Other countries are doing Better
While the US is moving slowly on deciding whether to approve ETFs, citing investor protection concerns, other countries are ahead. Canada has approved several Bitcoin and Ethereum ETFs, and the products have been performing well on the Toronto Stock Exchange (TSX).
On the other hand, the UK is scheduled to see the launch of the first product pegged to Bitcoin’s price movements. The company expected to launch this product is ETC Group, a UK firm dealing with investments related to virtual currencies. It is not the first time that this firm will be launching an exchange-traded product (ETP). The firm launched the same product on the German Stock Exchange, and it has managed to rack up trading volumes of around $5.4 billion.
Because of how the product performed in Germany, it is not looking to expand to other markets. The firm is partnering with Aquis Exchange, a regulated venue in the UK, to launch the ETP. The firm had planned to launch the ETP directly through the London Stock Exchange, but it was unsuccessful.
Bitcoin and Ethereum ETFs expected in US “by the end of 2021”
In exclusive comments provided to insidebitcoins, Todd Crosland, CEO at crypto exchange CoinZoom, said: “While the going list of ETF applications in the US continue to grow, Canada and the UK have embraced them.”
He notes that the SEC’s sluggish behaviour is a boon for proxy bitcoin ETFs such as Coinbase. He also expects a proper ETF to be approved before year’s end. “The US has a proxy ETF in the form of the Coinbase IPO. Investors can easily get exposure to crypto through investing in Coinbase. By the end of 2021, the US should have their first few Bitcoin and Ethereum ETF’s approved,” said Crosland.
The listing of the ETP in the UK is highly likely, given that the product is also available in Switzerland, where Aquis Exchange will also seek to clear it for the Swiss market. The UK is lenient towards securities operating in Switzerland after it allowed Swiss-listed products to continue trading in London after Brexit.
However, the Financial Conduct Authority (FCA), just like the SEC, is hesitant to approve crypto services in the UK market. More than 50 firms have withdrawn applications lodged with the FCA after heavy scrutiny.
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