By Shelly Melancon (Switzerland)
An ex-chairman of the Commodity Futures Trading Commissions (CFTC), Timothy Massad, opines that an approved Bitcoin Exchange Traded Fund (ETF) could promote integrity and transparency in the bitcoin space.
Massad’s Suggestion For The SEC
Massad made his opinion in a Bloomberg post published today. Massad wrote that “retail investors can invest in the virtual asset market via a bitcoin ETF without directly buying it or dealing with any direct consequences from the market.”
The Havard University John F. Kennedy School of Government research fellow also opined that the security and exchange commission could explore ways to enhance trade integrity and transparency on bitcoin exchanges through the bitcoin approval process. He suggested that the SEC should only grant approval provided the ETF price meets certain set standards as determined by an index of exchanges.
According to him, this is what is obtainable in the securities and derivatives exchanges. However, Massad quickly added that the SEC and the CFTC couldn’t impose rules and regulations on bitcoin exchanges since the leading cryptocurrency is neither a commodity nor security traded on futures contracts.
Massad further said, “it only means that none of CFTC or SEC has the power to set rules for any U.S. Based crypto exchange such as Kraken or Coinbase.” “Hence, there is weak protection for the investor. Abusive practices such as manipulation and fraud can be the order of the day. There are no laws, reporting standards or disclosure agreements.
Also read:There are no policies that prevent conflicting interests. It is a proven fact that some exchanges are biased with some of the virtual assets listed with them because they have invested huge sums in them. Also, some exchanges have patented trading applications that prevent users from profiting from some specific trades.”
Many Bitcoin ETF Proposals Before The SEC
Recently, many bitcoin ETF proposals have been submitted to the SEC. Several firms have been submitting bitcoin ETF proposals to the SEC for almost four years now. Even though the U.S. hasn’t approved any of them, its North American neighbor Canada has approved one and is reaping the benefits already.
However, this year the number of submitted bitcoin ETF proposals has increased. Valkyrie Digital Assets was the first firm to submit a bitcoin ETF proposal this year. NYDIG (an institutional provider of bitcoin solutions) submitted theirs in February.
Then, in March, two companies (Fidelity and Skybridge capital) submitted their bitcoin ETF proposals. In the same month, CBOE global markets submitted a filing to list and trade shares of VanEck’s yet-to-be approved bitcoin ETF. However, Eric Balchunas (an ETF analyst) has boldly claimed that the SEC might approve a bitcoin ETF this year.
The basis of his bold claim was the wider adoption of bitcoin by institutional investors over the last six months, which is a record. An approved ETF for any asset is an indication of a general acceptance which would be a huge milestone for an asset like bitcoin. Investors can have a simple and regulated way to access the asset without dealing with its complexities.
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