The SEC approved three Bitcoin futures exchange-traded funds listed on Wall Street this year. The United States does not yet have spotted Bitcoin ETFs, but Chile, Brazil, and Canada do.
In 2021, the US Securities Exchange Commission (SEC) approved three Bitcoin exchange-traded funds (ETFs) listed on Wall Street. The pioneering cryptocurrency could enter the leading financial center as a stock asset. That achievement, which took some bitcoiners eight years, reached a historic milestone since its entry into force in October.
A Bitcoin ETF is an investment fund listed on the stock exchange, considering the value of the cryptocurrency as the stock of a company. In other words, if the price rises or drops, the fund will consequently do the same.
Regarding spot Bitcoin ETFs, they match the current value of the pioneering cryptocurrency on the market. In the case of futures ETFs, speculative agreements of possible prices in terms of weeks or months support them. While the three Bitcoin exchange-traded funds in the United States are futures-based, both operate in other countries.
People Waited for Bitcoin to Go Public on Wall Street
Many invest in Bitcoin ETFs rather than buying the cryptocurrency directly as they seek a regulated instrument. That is of interest to institutions and companies.
People may invest money in an ETF through traditional brokers that offer company stocks. Besides, those unable to use wallets and exchanges have access to them since they receive more security.
Those users directly operating Bitcoin may find an ETF unnecessary, but the entry of the cryptocurrency to Wall Street has been a significant milestone. It represents the recognition of BTC as a high-interest financial asset on the leading stock market worldwide.
The SEC Rejected Bitcoin ETFs Listed on Wall Street for Eight Years
Disruptive changes like cryptocurrencies need an adaptation period and evaluation for regulators to accept them. Some bitcoiners had to wait for eight years until the US SEC approved the first Bitcoin ETF.
Cameron and Tyler Winklevoss, the owners of the Gemini exchange, submitted the first application for a Bitcoin ETF in 2013. The price of the crypto asset rose from USD 100 to USD 1,000. However, the regulator rejected that proposal, and others from multiple companies, in the following years.
The SEC does not have to give express authorization for an ETF to take effect, whether Bitcoin or another asset. During the mandatory evaluation period, the fund only needs the organization not to reject it, which happened on October 19th.
The SEC Should Approve Spot Bitcoin ETFs Listed on Wall Street
As the SEC considers that spot Bitcoin ETFs still do not provide enough security, they continue rejecting them. For that reason, the only three Bitcoin funds that went public on Wall Street in 2021 (ProShares, Valkyrie, and VanEck) are futures-based.
The chairman of the US SEC, Gary Gensler, stated that they are attempting to introduce new investment projects. He explained that the federal regulator Commodities Futures Trading Commission supervised BTC futures ETFs with favorable results. However, they still have not felt confident enough about spot ETFs in the last four years.
On their part, Congressmen Tom Emmer and Darren Soto warned that both types of funds involve the same level of risk. That led them to think that the SEC should allow spot ETFs, the same as they have done with futures ETFs.
By Alexander Salazar
