“I’m just hopeful that we set our minds to work at building something that makes sense in terms of regulatory clarity, instead of always just falling back on enforcement,” said Peirce.
Despite SEC Chairman Gary Gensler having said multiple times why such proposals have been rejected , the true reasons seem opaque. The watchdog boss has called for Bitcoin firms and platforms to talk with the commission and “get registered,” as concerns over its abilities to ensure investor protection and prevent fraud and manipulation have led the SEC to deny every single proposal that arrived on its desk to date. Peirce herself, an SEC insider, said she doesn’t understand why there isn’t a spot bitcoin ETF trading in the U.S. yet as she argues the arguments being made to justify the denials have been outdated for some time.
“I can’t believe we’re still talking about this as if, you know, we’re waiting for one to happen,” Peirce said. “We’ve issued a series of denials even recently, and those continue to use reasoning that I think was outdated at the time.”
Although little has been done to move a spot bitcoin ETF proposal forward by the SEC, regulation is trying to keep up with Bitcoin now more than ever and 2022 could be a year that things start to change and such an offering becomes available to U.S. investors. An approval might come simply due to game theory, as the SEC’s scrutiny led banking giant Fidelity to launch its bitcoin fund in Canada after frustrated attempts to do it locally . Filers need to meet investors’ demand for a convenient vehicle for direct, rather than indirect, exposure to the bitcoin price and it will be up to the SEC to determine whether these products will be available in America or elsewhere.
“Chair Gensler has said he wants to see platforms registering with us,” Peirce said. “So maybe that’s what it takes for a spot product to get approved.”
Despite the U.S. thirst for a spot bitcoin ETF , the truth is such an offering isn’t strictly necessary and should be avoided by most investors. Retail investors can get better exposure to the bitcoin price by buying and custodying BTC themselves, a way in which they also get to benefit from the peer-to-peer network’s resistance to manipulation and censorship – something they wouldn’t get from a bitcoin ETF. Institutional investors, on the other hand, could leverage MicroStrategy’s playbook and get actual bitcoin without moving the market. For other cohorts which can’t buy and hold bitcoin themselves, It might be a matter of having their investment policies adapt to Bitcoin rather than the innovative money bend to fit existing investment practices.
