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Bitcoin ETFs are a hot topic in the crypto space. It has been an uphill battle as investment firms struggle to get the Securities and Exchange Commission (SEC) to approve the first bitcoin ETF in the country. The push for approval has intensified in the past couple of months with more institutional investors throwing their hats in the ring with crypto. Various funds have filed for crypto ETFs in the country but none has received the nod of approval from the regulatory body.
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There are tens of crypto ETFs pending the SEC’s approval spanning over eight years. Canada and Brazil are the two countries with approved crypto ETFs, and although U.S. citizens can trade crypto ETFs through their ROTH accounts, there is still no approved crypto ETF in the country. Ahead of pending bitcoin ETF approvals, asset manager James Seyffart and colleague Eric Balchunas have put forward a 75% chance that the SEC approves the first U.S bitcoin ETF.
Two Reasons Why A Bitcoin ETF May Get Approved
Two factors contribute to Seyffart’s 75% chance forecast. Mostly, these come down to the previously approved mutual funds and SEC boss Gary Gensler’s stance on crypto. Gensler has been in the media for comments regarding the crypto space, but mainly on crypto regulation. According to Gensler, the SEC has no intention of banning cryptocurrencies as that is Congress’ prerogative but has said that the SEC was working on regulating the space.
BTC price trading above $54K | Source: BTCUSD on TradingView.com
Seyffard put forward that a bitcoin ETF carried the same language as an approved Canadian mutual fund. The asset manager explained that since the SEC had approved the mutual fund with the same language, then there is a high chance that it would approve the bitcoin ETF.
In addition, Seyffart pointed to Gensler’s stance on crypto ETFs. Gensler had previously said that he looked forward to reviewing ETF filings, especially if those were “limited to CME Bitcoin Futures.”
The 2nd is that Gensler was pretty damn explicit in his August 3rd comments that started this part of the Bitcoin ETF race — about being "limited to CME bitcoin Futures". But i honestly feel like we're trying to read the tea leaves like people read the Fed minutes. Who knows 4/x pic.twitter.com/smRtfdkMQ0
— James Seyffart (@JSeyff) October 8, 2021
SEC Asks For Ethereum ETF Withdrawals
A compelling argument for why the SEC might approve a bitcoin ETF by the end of October, Seyffart says, was the fact that the SEC had forced two ETFs to be withdrawn. These ETFs were both Ethereum ETFs, but the regulator did not ask for the withdrawal of any of the BTC ETFs. Both VanEck and ProShares had been asked to withdraw their ETH ETFs. While the bitcoin products were left untouched.
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Seyffart also added that Gensler was not against the crypto space. The SEC had earlier published a report which featured favorable language for crypto ETFs, as seen below;
The asset manager did not see a reason why the regulator would use this language, only to turn around and deny the approval of crypto ETFs not even a month later. Seyffart says doing this would just be “psychopath level cruelty.”
In conclusion, James Seyffart admitted that he and his colleagues were in the minority with their bullish stance on the approval of the crypto ETFs. But nonetheless continue to maintain their faith that the regulator would approve some bitcoin ETFs by the endow the month.
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