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Earlier this week, US Securities and Exchange Commission (SEC) Chairman Jay Clayton said at a conference in New York that, to approve a Bitcoin exchange-traded fund, the SEC had need a market free of any manipulation.
Clayton said:
"What investors expect is that the trading of this underlying commodity in the ETF is a meaningful transaction that is free of risk or significant risk of manipulation. This type of protection does not exist in many markets where digital currencies are traded. "
The SEC believes that most crypto-currency exchanges in the global marketplace do not have safeguards in place to eliminate the risk of manipulation, making it increasingly unlikely that an ETF will be established. on a cryptocurrency exchange.
And now?
In July, the Bitcoin ETF's deposit of the Winklevoss twin was officially rejected by the SEC. At the time, the commission had stated that Gemini, a highly encrypted switch based in the United States, was vulnerable to manipulation and pointed out that cryptocurrency trading, in general, was not mature enough. to manage an ETF.
Since the rejection of the Winklevoss Bitcoin ETF, the SEC's position vis-à-vis cryptocurrency trading is clear to the public. As a result, various organizations, including ProShares, have attempted to circumvent the SEC's decision by introducing an ETF in addition to a futures market.
The SEC also rejected a futures-based ETF in August as the commission found that the futures market was not large enough to support an ETF.
In February, VanEck, a New York-based investment management firm with more than $ 47 billion in badets under management, will deposit a Bitcoin ETF into the ETF, which should be badessed by the SEC. The VanEck ETF is different from previous ETF deposits because it bases the price of bitcoin on the over-the-counter market through an index.
In the past, no ETF has attempted to use the over-the-counter market to determine the base price of Bitcoin. According to Gabor Gurbacs, Digital Asset Manager at VanEck, OTC trading desks tend to be more robust, regulated and liquid than stock exchanges, which could meet SEC requirements.
"OTC trading desks are more robust, more efficient, more liquid and better regulated than most encryption platforms. He is an important hero and often misunderstood in the crypto institutional space, "said Gurbacs.
Emphasizing that his statement reflected his personal point of view, and not VanEck's position, Gurbacs also added that the ETF could respond appropriately to comments made by the SEC:
"I think the comments raised about prices, monitoring and care all provide appropriate answers. The structure of the digital badet market is evolving rapidly and in the right direction. "
Will VanEck be approved?
Whether the VanEck Bitcoin ETF is approved by the SEC or not remains uncertain. But this represents an innovative attempt to suggest to the SEC that the over-the-counter market, considered at least two to three times larger than the cryptocurrency currency market, could provide sufficient liquidity for an ETF.
Brookings Institution / YouTube Featured Image
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