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SEC Chair Gary Gensler’s Comments Concern Bitcoin ETF Prospects

cryptoknowmics.com 06 August 2021 03:18, UTC
Reading time: ~2 m

Gary Gensler, SEC Chair, commented that he would prefer an ETF backed by Bitcoin futures rather than an actual BTC. Prospective ETF investors are unsatisfied. 

The recent statements made by SEC Chair Gary Gensler about the cryptocurrency business have concerned Bitcoin ETF applicants in the United States.

Various Well-known Businesses Have Applied To The SEC For A Bitcoin ETF

Many of the firms that recently petitioned the SEC for permission to launch a Bitcoin ETF, including Anthony Scaramucci's Skybridge Capital, were optimistic that Gensler who had previously expressed an interest in crypto as a "catalyst for change" would finally approve the investment product that had eluded the crypto market for years.

However, in comments made Tuesday at the Aspen Security Forum, Gensler indicated that he would only be open to licensing a Bitcoin ETF if rigorous regulations were followed, and not necessarily one that provided direct Bitcoin exposure, as originally reported by Bloomberg. 

According to Gensler, he "especially looked forward to" the SEC's investigation of "ETFs restricted to these CME-traded Bitcoin futures."

Experts believe that a Bitcoin futures exchange is not what the market wants. "People don't want Bitcoin futures exposure; they want actual Bitcoin exposure," according to one expert. 

He claims that launching a Bitcoin futures contract is both costly for the issuer and costly for investors.

According to Gensler, a Bitcoin exchange-traded fund (ETF) in the United States would be acceptable. Gensler: 

The CME Group is a derivatives market that trades Bitcoin futures, which are bets on the price of the world's largest cryptocurrency. 

SEC Chair Gary Gensler Is Not Happy About The Prospect Of A Physically-backed Bitcoin ETF

Due to market manipulation concerns, the SEC has been hesitant to approve a Bitcoin ETF. Gensler's willingness to consider a Bitcoin ETF that follows futures contracts would only expose investors to contracts that gamble on the price of Bitcoin fluctuating. 

The Commodity Futures Trading Commission regulates the futures market, but the Bitcoin spot market is not regulated by either the CFTC or the SEC.

A Bitcoin futures exchange, according to crypto investor Seyffart, would be a "minor step" for US investors. 

However, he believes it is too early to discuss a futures exchange due to a lack of regulation. 

He also stated that even if Bitcoin is manipulated, market manipulation will be an issue for a futures ETF.

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