The SEC has requested more time to review the application by VanEck for a Bitcoin ETF. If approved, it will become the first Bitcoin ETF in the country.
The US Securities and Exchange Commission (SEC) has stated that it will take more time before deciding whether or not to approve the launch of VanEck’s Bitcoin ETF. The SEC report comes as the new head of the SEC, Gary Gensler, takes time to review applications.
If the SEC approves the Bitcoin ETF, it will be the first in the country. It will give investors direct exposure to crypto assets. ETFs target investors who are not willing to invest directly in cryptocurrencies. Investors, therefore, buy stocks of companies operating in crypto to mitigate risk.
Move to Protect Investors
The main reason why the SEC is delaying the decision to approve this ETF is to protect retail investors in the field. The regulator had earlier stated that the crypto market is very volatile and prone to manipulation.
A decision to approve an ETF usually takes 45 takes from the time of application. However, the regulator has stated that it will take longer to come up with a decision, as it will have to review the proposed rules and the collected views on the matter.
VanEck had filed the application for a Bitcoin ETF towards the end of last year, which created a buzz in the crypto community. In its application filing, VanEck argued that Bitcoin had significantly evolved and matured, enhancing efficiency and scalability similar to what is in the equity markets, commodity markets, and fixed income markets.
Likelihood of the Bitcoin ETF Being Approved
After Gary Gensler was appointed as the new chair of the SEC by President Joe Biden, the crypto community was very optimistic. Gensler has experience in crypto, given that he was a professor at MIT teaching courses on blockchain and cryptocurrencies. Besides, he is also seen as open-minded towards crypto assets.
Gensler had earlier also stated that he would review the recommendations provided by the US treasury on cryptocurrencies. The previous secretary of the treasury, Janet Yellen, has been a prominent critic of cryptocurrencies, and the regulator now has a hard time making an informed decision on the matter.
Besides the US, other countries have made significant strides regarding cryptocurrencies, with China leading the way by launching the digital yuan CBDC. However, the US is prioritizing regulating the market first before making any regulations or decisions.