The US regulator again delayed the verdict of another spot Bitcoin ETF. Will 2022 be decided to give the long-awaited yes to a product of this type?
The United States Securities and Exchange Commission (SEC) has again decided to delay its decision on a Bitcoin spot exchange-traded fund (ETF). This time, it is about the NYDIG request.
This week, the regulatory agency filed an extension notice for the Bitcoin ETF from NYDIG, a subsidiary of asset manager Stone Ridge Holdings Group. In a statement, the SEC indicated that it postponed the verdict for at least 60 days, which means that NYDIG can now expect a response on its proposal before March 16.
SEC is Still Skeptical of a Physical Bitcoin ETF
In February of last year, NYDIG submitted a proposal for a spot Bitcoin ETF. At the time, an official filing revealed that the fund would track the price of the first cryptocurrency while the BTC funds would get held in trust. Additionally, banking giant Morgan Stanley will serve as an authorized participant in the ETF, which could trade on the NYSE Arca exchange.
The US regulator was about to issue a decision regarding the investment product by January 15 this year. However, as happened to other applications before, the SEC has extended the deadline to approve or reject the proposal.
An ETF is an investment product that allows investors to buy shares that could represent an asset without dealing with it directly; it can be currency, gold, or Bitcoin. Cryptocurrency enthusiasts have long pursued the launch of a Bitcoin ETF; a product they believe will open the doors to traditional investors, boosting the price.
Last year the SEC first approved a Bitcoin futures ETF. The arrival of such a product on the market created a precedent for the crypto space; it caused a rise in the current price for cryptocurrency.
Other similar funds have since gone public. However, a futures ETF is not the same as a spot one. The former got based on contracts that bet on the future price of Bitcoin, while the latter tracks the asset itself.
US regulators have yet to approve the first spot (also called “physical”) Bitcoin ETF, and in general, they have rejected an extensive list of requests of this type. The latest term extension to the NYDIG ETF comes after decisions on the Bitwise, Grayscale, and WisdomTree products got postponed in December.
Meanwhile, various analysts have highlighted that a great interest in the US market for a physical Bitcoin ETF surfaced, with some even anticipating that 2022 could be the year that the first one is finally approved. However, SEC Chairman Gary Gensler has shown little enthusiasm for the approval of such a fund.
By: Jenson Nuñez