The long history between the SEC and Bitcoiners about approving a Bitcoin ETF has disappointed many. This much anticipated move will allow BTC to trade on the Wall Street stock exchanges and attract a growing pool of capital and institutional investors. However, the federal agency has repeatedly delayed the decision, including due to concerns about instability and liquidity.

New SEC chairman Gary Gesner certainly raised hopes when news spread that he is a crypto enthusiast. In a recent interview, Osprey Funds founder and CEO Greg King said the SEC’s new appointment may not be enough to give a green signal to a BTC ETF.

“He’s certainly more knowledgeable than the previous person … maybe even more critical because he has expertise and important issues that the SEC has raised over the years.”

While previous concerns about liquidity and custody have been somewhat addressed, King says manipulation is still paramount. These include the pumping of meme coins by influencers like Elon Musk in social networks. Just yesterday, he tweeted again to support Dogecoin and drive the price up after a week-long decline.

In addition, crypto assets are traded on global exchanges that operate around the clock. With Wall Street exchanges trading only 6.5 hours on weekdays, the value of assets rising or falling during the hiatus can be devastating to investors. According to King, the SEC commissioners have an obligation to ensure the stability of the assets they approve.

A number of crypto funds have since sprung up to fill the void and give the asset legitimacy in the eyes of large investors. Osprey launched its own BTC fund this year, which King hopes will soon turn into an ETF. The main difference between the two asset classes is how new units can be created and made available to investors.

“It cannot be publicly offered, must be made available primarily to accredited investors, and there is a delay in creating new units so you know that market demand is met.”

This is the reason for the recent negative GBTC Grayscale fund premium. Hedge funds have invested heavily in trusts, resulting in billions of dollars worth of AUMs and the unresponsive creation of new entities, resulting in supply shortages. However, when premiums fell, these short-term investors withdrew and the reduced demand resulted in negative premiums.

Source: YCharts

Similar to gold, King also said that while BTC doesn’t need an ETF, it can drive sales. Although gold has been traded for thousands of years, ETFs allow the asset to exist in the portfolio conversations of ordinary investors. Additionally, consumers no longer have to go out and buy assets and worry about storage that many BTC investors also face.

The decision of other countries like Canada and Brazil to allow a BTC ETF without much advice could have influenced further delays by the SEC as the US doesn’t want to be a follower due to the pressure. King concludes:

“I think the space has moved a lot and in my opinion a Bitcoin ETF is possible, but I’m not sure the SEC thinks so. And if that happens, it will happen next year, not this year.”

Annie

According to Ambcrypto

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