Are there chances to have a US-based Bitcoin ETF now?

Bitcoin ETF

There resides a state of confusion regarding the term ‘Exchange’ in the US, restricting several actions but seems to change soon

For a long time now, spot Bitcoin ETFs have been seeking their ways for launch but got a rejection by the US Securities and Exchange Commission. But several analysts now consider that there are chances and an escape way out of the maze of SEC rejections. Bitcoin Spot ETFs are looking forwards to exposure after multiple failures in getting approved by the authorities. 

The way those analysts think is stated better by Bloomberg senior analyst James Seyffart. He said that proposal of defining the terms ‘exchange’ again would serve as a crucial element in approving a Spot bitcoin ETF. The analyst considers that the agency would grant the approval permission for spot ETF soon, either in the first or second quarter of next year. 

The Security and Exchange Commission, on January 26th, proposed the expansion of the existing definition of exchanges and brought it beyond the scope of the earlier act of Securities Exchange in 1934. The amendment proposal looks for the availability of trading of any security type through Communication Protocol Systems and those that would regulate a marketplace appropriately, bringing security buyers and sellers together. 

Although the proposed definition expansion does not contain anything specifically for cryptocurrencies, Seyffart believes that the expansion of the definition would be broad enough to apply to crypto exchanges and possibly to decentralized finance systems. 

Syeffart thinks that once the definition gets updated, the bitcoin community could expect the first bitcoin spot ETF approval soon. He wrote that we expect that there would be changes finalized somewhere between November 2022 to May 2023. This would happen because once the crypto exchange becomes compliant, the SEC’s primary reason for denying the Bitcoin spot ETFs would be invalid, and that would likely clear the new ways for approval. 

But it’s not all been good after the SEC revised the definition of ‘exchanges’; at least some DeFi sector-related individuals think so. For instance, The DeFi Education funds show concern regarding the definition expansion of an exchange. DeFi funds asked individuals to write to the commission for clarification about the change proposal as it could create uncertainty for the DeFi sector. 

In October 2021, the SEC approved the first Bitcoin futures ETF of ProShares Bitcoin ETF. As per the agency, future based ETFs have to offer the best investor protection. However, it didn’t minimize the scepticism regarding bitcoin spot ETFs. The SEC rejected bitcoin spot ETFs so many times, considering the latest one on April 1st, of Ark 21Shares. 

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Nancy J. Allen

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