The prospect of a Bitcoin spot ETF in the United States appears to be hitting roadblocks, particularly from SEC Chair Gary Gensler, according to recent research findings.
QCP Capital, a trading firm, aired this opinion in its market update on June 22, casting some doubt over the immediate future of spot ETFs.
Gensler’s Stance Poses a Hurdle for Bitcoin ETF
Bitcoin BTC $30,035’s price has surged over 20% since BlackRock, the globe’s leading asset manager, lodged an application for a U.S. spot Bitcoin ETF.
This would be the first of its kind, given that all previous spot ETF applications have faced rejection by the U.S. Securities and Exchange Commission (SEC), the regulatory body overseeing ETF approvals.
Though QCP Capital anticipates growing institutional interest in Bitcoin, the current SEC composition suggests that immediate approval of spot ETFs is improbable.
This scenario is further complicated by the current SEC Chair, Gary Gensler, who has presided over lawsuits against significant cryptocurrency exchanges such as Binance and Coinbase.
“However, with Gensler at the helm of the SEC, we’re skeptical about a near-term approval of the actual ETF,” stated QCP Capital in their update.
This perspective offers some food for thought, particularly when considering BlackRock’s record of only one SEC rejection out of 576 applications to date, a fact noted by the researchers themselves.
“Nevertheless, as we have consistently maintained, institutional BTC and ETH have a significant role in the world of asset management, and the forthcoming months and years will see continued strides in this direction,” the update concluded.
Grayscale Bitcoin Trust (GBTC) Gains Momentum
Beyond BTC’s price performance, ripple effects from BlackRock’s application have manifested elsewhere.
The Grayscale Bitcoin Trust (GBTC), having bounced back from its shares trading nearly 50% below BTC/USD, continues to recover.
As of June 22, GBTC’s discount to BTC spot, also referred to as a discount to net asset value (NAV), has shrunk to its lowest 2023 level of 33.45%, based on data from the monitoring platform CoinGlass.
QCP Capital also highlighted that GBTC’s recent performance marks its “sharpest” recovery since late 2020, when Bitcoin outperformed its previous all-time highs set in 2017.
The reluctance to approve a Bitcoin spot ETF reflects ongoing regulatory uncertainties in the crypto space. For investors, it’s essential to understand that while cryptocurrency holds significant potential, it also comes with regulatory challenges that can impact investment decisions.
The rise of institutional interest in Bitcoin and other cryptocurrencies is an encouraging sign of digital assets’ growing legitimacy. However, as the regulatory landscape evolves, investors should be prepared for potential volatility and uncertainty.
Gary Gensler’s leadership at the SEC underscores the agency’s commitment to investor protection and market integrity. This approach could lead to stricter regulatory oversight, which, while potentially slowing the approval of products like spot ETFs, can ultimately contribute to a safer and more transparent investment environment.