The wait for the first bitcoin exchange-traded fund (Bitcoin ETF) on a U.S stock exchange continues…
It can be recalled that the SEC just yesterday rejected a proposed rule change submitted by the NYSE Arca. Like other proposals that the regulator has bounced to date, the recent one could have enabled Wilshire Phoenix to list its Bitcoin-like product on the NYSE Arca.
In the SEC’s report, the commission noted that its constant refusal to approve the listing and trade of the Bitcoin ETF is as a result of market manipulation fears and a lack of surveillance-sharing agreements.
However, just like Commissioner Hester Peirce (a crypto advocate) described it, the SEC’s take on ETF is “frustrating because it evinces a stubborn stodginess in the face of innovation.”
Clearly, this is not the first time Peirce would disagree with the SEC’s rule on approving a Bitcoin ETF to be listed and traded on a national stock exchange under its control.
The commissioner had earlier fallen out with her colleagues in 2018 after the SEC rejected the NYSE Arca proposed rule change that could have seen Winklevoss Bitcoin ETF listed on the Bats BZX exchange.
However, the SEC’s recent refusal to approve the NYSE Arca proposed rule change for Bitcoin ETFs has made Peirce conclude that the commission is not willing to give the regulatory green light to any crypto-related firm to list any product that would provide access to the market for Bitcoin ETF.
She even wrote explicitly:
[…] No filing will meet the ever-shifting standards that this Commission insists on applying to bitcoin-related products—and only to bitcoin-related products.
Interestingly, though, despite the SEC’s constant rejection of Bitcoin ETFs, the crypto community has resolved to see the silver lining in the cloud.
Bitcoin ETF Rejection Leaves the Room for More ‘Real’ Bitcoin Education
As evidenced by comments on a Twitter thread started by FartFace2000, the commission’s take on Bitcoin ETF could be “a blessing in disguise” because the constant refusal could also promote the real widespread adoption of Bitcoin (BTC).
For one thing, a Bitcoin ETF would mean that investors can get exposure to bitcoin without actually holding the underlying asset, a situation that would deprive them of the opportunity to learn the basic self-sovereign concept of bitcoin.
At this time in the history of the asset, most investors are learning about the freedom of money, and how to safeguard their wealth themselves via private keys, instead of relying on a third-party such as a bank.
While a Bitcoin ETF would, in a sense, make it more convenient for retail investors to invest in bitcoin, it would bring mass education about the sovereign money promise of the cryptocurrency to an abrupt end.
In the end, though, with a Bitcoin ETF almost likely to be approved at some point, the industry certainly would have to trade mass adoption and new capital inflows in exchange for the basic concepts that bitcoin imbibes.