The CEO of fintech company Circle, Jeremy Allaire has expressed confidence that the securities and exchange commission (SEC) will soon grant a license for a Bitcoin spot ETF. Jeremy, who’s also a co-founder of the company said the chances of approval is high due to the evolving nature of the industry.
Speaking with Bloomberg, he said that the concerns that hitherto hindered the approval for a Bitcoin spot ETF are currently being addressed, making way for a final approval.
“I think progress is being made with more mature market structures that would support something like that. You have mature spot markets, well-regulated custody infrastructure, and good market surveillance,” he said in a statement.
There have been several applications submitted for a bitcoin spot ETF over the years, but none of them have been approved by the SEC. The commission has on several occasions rejected such applications, citing concerns about investor protection in the highly volatile crypto industry
Companies such as VanEck have applied multiple times, but the best that has been approved is a Bitcoin futures ETF. While it is also an ETF, it does not give investors the direct exposure to Bitcoin that a spot ETF does.
Concerns Being Addressed
The concerns around the crypto industry are real and genuine. For example, the issue of volatility is a characteristic of cryptocurrencies that cannot be denied. One of the solutions to this is stablecoins. Although they are technically cryptocurrencies, they are pegged to a relatively stable fiat currency such as the USD, or to a commodity like gold.
This makes them stable enough to use as a currency for buying and selling, since the value doesn’t change so wildly in a short time.
Other adjustments in the industry include compliance with regulatory requirements which even though the US doesn’t have clarity on, the industry is trying to comply. This is seen in the decision of crypto exchanges to delist cryptocurrencies tagged as securities by the SEC.
Right now, the SEC is in a major crackdown on cryptocurrencies in the US, with Binance and Coinbase dragged to court despite their efforts at complying with the unclear regulations. This leaves a lot of questions on whether the SEC would ever grant approval for a Bitcoin spot ETF.
Potential Growth for Crypto
It is no secret that the SEC has strong negative sentiments towards cryptocurrencies and associated companies, which is why many would doubt any possibility of a Bitcoin spot ETF seeing the light of day.
However if Allaire’s optimism turns out to be true, the crypto industry may experience a boost like never before. Industry experts have severally said that a Bitocin spot ETF is what many corporate investors are waiting for to enter the industry.
These are the companies with the big money, but they’re concerned about the many uncertainties in the industry. If the industry can fully address those concerns and succeed in securing a Bitcoin spot ETF, there will be a lot of room for bitcoin and other cryptocurrencies to grow significantly.
With a Bitcoin spot ETF, investors will be able to trade shares representing bitcoin without actually owning bitcoin. They will then benefit from the growth of the asset without being exposed to the risks associated with holding and managing it. This is what the industry is waiting for.