Skepticism by the Bitcoin ETF in the short term
The SEC has again rejected a pending application of Bitcoin ETFs and many analysts believe that, at least in the short term, the chances of the SEC approving a Bitcoin ETF are low.
During a CNBC broadcast on March 7, several investment company executives said the US Securities and Exchange Commission (SEC) will soon have to issue licenses for the creation of a Bitcoin ETF if retail demand increases significantly. According to executives' analysis, a significant increase in retail demand would strongly pressure the SEC to finally grant licenses for the expected Bitcoin ETF.
The SEC recently rejected the last pending application of Bitcoin ETF due to concerns about the manipulation of the cryptocurrency market and the high risk to investors as a result of the limited protection granted by the Bitcoin market. Wilshire Phoenix submitted six Bitcoin ETF applications to the SEC from January 2019 to date and all have been rejected.
However, the director of institutional business development at IndexIQ, Chris Hempstead, believes that the SEC's decision could change in the coming years. I explain: "At some point, when market demand and demand from investors push the pendulum to a certain area, they will probably examine it again and have different types of considerations." Meanwhile, DataTrek co-founder Nick Colas is quite skeptical about SEC licenses for the creation of a Bitcoin ETF, at least for the short term. Colas said: "You'll see a cryptocurrency from the central bank before seeing a Bitcoin ETF."