SEC Postponed Decision On Bitcoin ETFs

SEC Is Not Ready To Present Its View On Hard Asset Backed Bitcoin ETFs

Those traders who are waiting for full acceptance of hard asset backed Bitcoin ETFs will have to wait until February 2022.

According to the recent notice from the SEC which was made on December 15, 2021, the commission has decided to delay its decision on whether Grayscale Bitcoin Trust is eligible to be listed and traded under NYSE Arca Rule 8.201-E (Commodity-Based Trust Shares). SEC stated that the decision will be made by February 6, 2022. The decision on Bitwise Bitcoin ETP Trust was postponed until February 1, 2022.

The problem is that no physical-backed Bitcoin ETFs are available as SEC is not comfortable with Bitcoin as an underlying asset. Interestingly, futures-backed products like ProShares Bitcoin Strategy ETF or VanEck Bitcoin Strategy ETF were given the green light.

It will be interesting to see how SEC will defend its decision to not allow hard asset backed ETFs when it allowed futures-backed ETFs, and whether it is ready to change its stance.

Why SEC Decision On Bitcoin ETFs Will Be An Important Catalyst For The Industry

While futures-backed Bitcoin ETFs were clearly a step in the right direction, the potential SEC decision to accept hard asset backed Bitcoin ETFs would be a major mileston for the industry as it will signal that Bitcoin is a normal financial asset, like stocks or commodities.

This decision will widen the pool of potential investors and provide support to the price of Bitcoin. Other leading crypto currencies like Ethereum, Binance Coin, Solana and Cardano will benefit indirectly as investors’ interest in the crypto space should increase after the emergence of first “real” Bitcoin ETFs.

The amount of assets under management in ETFs is constantly growing, and they have become one of the main vehicles for passive investors which traditionally provide key support to markets. If SEC approves hard asset backed Bitcoin ETFs, the crypto industry will gain an additional funding source.

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