SEC rejected all the Bitcoin Exchange Traded Funds (ETF) proposals pending before it, citing they did not meet legal requirements to curb market manipulation and other illicit activities. The latest ETF to be rejected was that of Bitwise Asset Management. However, SEC wrote a detailed 112-page response to why they rejected the application.
Subsequently, Bitwise stated that the detailed response from the SEC is a step forward as it provided necessary clarity on what they needed to do in order to get their application approved. With a significant rise in regulated derivative Bitcoin products in recent years, many in the crypto space are sure that Bitcoin ETFs are not far from reality.
Grayscale Investment Managing Director Michael Sonnenshein is one of them who said that Bitcoin ETFs is a matter of “when” rather than “if,” during his recent appearance on ‘The Scoop‘ The firm had applied for a ’33 act ETF’ registration for its product back in 2017 but withdrew their application back then as they believed the market was not ready for it. However, Sonnenshein claimed that the market is in a much better state than ever. he explained,
“when we have conversations down in D.C. folks have generally been pretty proactive about the space. The level of understanding that they have when we’re there has ramped up so substantially over the last few years and an ETF is really more of a matter of when not so much a matter of if.”
Sonnenshein also claimed that the rise of more regulated Bitcoin products in the market is good for everyone as it would lead to more capital inflow into the digital space.
Bitcoin Derivative products could bridge the gap between traditional and digital financial space
Until 2018, institutional investors kept a safe distance from the crypto space, citing high risks and volatility of the asset class. however, with the start of 2019, there has been notable progress and a definite rise in the interest of these institutional investors towards the digital asset class.
These investors prefer regulated derivative products over any other option as it assures the security of their funds. CME was among the first to launch Bitcoin derivative product in the form of Bitcoin Futures, LedgerX started offering swaps and options. Exchanges like Binance and OKEx have started offering futures trading platform as well. Thus, it is just a matter of time before Bitcoin ETFs also become a mainstream investment tool for institutional investors.