Does The SEC Prefer ETH Futures to Spot BTC ETF?
As the crypto industry reaches a gradual adoption stage, one of the key events that will help drive its global adoption is the approval of crypto-ETFs for public trading. In the United States, several crypto companies have submitted requests for the US Securities and Exchange Commission (SEC) to approve their various ETFs for listing on the stock exchange.
Although a few have been approved, the SEC recently rejected a Bitcoin Spot-ETF request that was submitted by VanEck, a top global investment firm based in the US. Van Eck had submitted a Bitcoin ETF that would track the assets price action and reflect the same for investors. But the SEC said no because the Bitcoin spot market is susceptible to being manipulated and used fraudulently. It is important to note that the Bitcoin-ETFs that were approved by the SEC are all futures-based and not spot-based.
From all indications, therefore, the SEC prefers to approve an Ethereum futures-ETF than a Bitcoin spot-ETF. Since making its position on the approval of Bitcoin spot-ETFs known last week, the SEC has not approved any ETFs; spot or futures, although there are still several pending requests that are being reviewed.
The SEC May Approve ETH Futures
Despite not approving Bitcoin spot-ETFs, the SEC might be looking to approve Ethereum futures-ETFs. According to James Seyfffart, a senior analyst at Bloomberg, the SEC may approve the first-ever Ethereum futures-ETF within 9 months.
Seyffart noted that despite the general belief that Bitcoin spot-ETFs would be better than the futures-ETFs, the SEC is reluctant to approve them because of the underlying risks that they carry. Because Bitcoin is unregulated and volatile, it is considered a risky asset for trading spot-ETFs.
Bitcoin alone accounts for nearly 45% of the entire cryptocurrency market capitalization and has the biggest value on the market today. Four years ago, the first Bitcoin ETF was proposed but it was only until last month before investors got the chance to trade them after the SEC approved two of them.
The entry of institutional traders into Bitcoin has increased its value and has given it a near god-like status in the industry.
Crypto Regulation and ETFs in the US
According to the chairman of the SEC, Gary Gensler, the volatility of cryptocurrencies makes it necessary for some sort of regulations to be reached. Gensler has also asked the major players in the crypto industry to approach the SEC for discussions on how best to implement crypt trading instruments.
Following the SEC’s disapproval of VanEck’s Bitcoin spot-ETF, several other companies have either withdrawn their Bitcoin Spot-ETF applications or converted the request to a Futures-ETF.
But several commentators have said that the SEC’s rejection of Bitcoin spot-ETFs is only a form of control to keep the power with the government. They believe that the SEC is being evasive about the issue of manipulation and fraud as they think that the futures-ETFs are more prone to manipulation than the spot-ETFs.
As the government deliberates what regulations are appropriate for cryptocurrencies, the future of crypto ETFs may be turned towards Ethereum.
Tokenhell produces content exposure for over 5,000 crypto companies and you can be one of them too! Contact at info@tokenhell.com if you have any questions. Cryptocurrencies are highly volatile, conduct your own research before making any investment decisions. Some of the posts on this website are guest posts or paid posts that are not written by Tokenhell authors (namely Crypto Cable , Sponsored Articles and Press Release content) and the views expressed in these types of posts do not reflect the views of this website. Tokenhell is not responsible for the content, accuracy, quality, advertising, products or any other content or banners (ad space) posted on the site. Read full terms and conditions / disclaimer.
