The SEC has published VanEck’s Bitcoin ETF application.
- The agency must make a decision on the application within 45 days, although this period can be extended to a maximum of 240 days.
After being filed in late 2020, the U.S. Securities and Exchange Commission (SEC) has officially recognized and published VanEck’s Bitcoin ETF proposal. As of now, the regulator must issue an initial decision on VanEck’s proposal within the next 45 days.
Firm VanEck submitted its proposal last December after Bitcoin reached an all-time high price. The VanEck Bitcoin Trust Exchange Traded Fund (ETF) would trade on the exchange Cboe BZX if approved. The trust would give its investors exposure to BTC’s price, without being physically backed by the cryptocurrency.
The Bitcoin community and the general public will now have 21 days to submit comments on the SEC’s portal. Furthermore, the SEC has the power to extend the application review period for up to 240 days. Historically, the regulator has always taken the maximum time before issuing its decision. However, the current scenario is different.
New landscape favors Bitcoin ETF approval
The SEC has refused to approve a Bitcoin-based ETF in 2019 and 2020 primarily for two reasons. On the one hand, it has called the Bitcoin market vulnerable to manipulation, unregulated and unsafe for investors; on the other hand, it has also stated that the market is too small and needs institutional participants.
The last pending application to the SEC for approval of a Bitcoin ETF was denied in February 2020. At that time, Wilshire Phoenix and NYSE Arca applied for an ETF composed of Bitcoin and U.S. government bonds. However, since then, the market has matured. At the time of publication, Bitcoin has a market capitalization of more than $1 trillion. In addition, institutional giants and corporations with billion-dollar valuations have embraced BTC.
However, the key to the approval of a cryptocurrency-based ETF seems to be Gary Gensler as upcoming chairman of the SEC. Approved by the U.S. Senate Banking Committee, Gensler is cleared for confirmation by the Senate. The nominee for the position is known for his pro-cryptocurrency stance.
Another factor playing in favor of VanEck’s proposal might be the approval of 3 Bitcoin ETFs in Canada. In addition, as SEC Commissioner Hester Pierce has expressed, investors may seek less “efficient” methods to gain exposure to Bitcoin. Yesterday, Morgan Stanley announced 3 funds that will allow its wealthiest clients to gain exposure to the cryptocurrency.
With that, Morgan Stanley has become the first major bank in the US to make a similar offer. Behind Morgan Stanley’s initiative, was a high demand from its clients. As a result, the SEC may be under more pressure than ever. Currently, there are a total of 4 Bitcoin ETF proposals on file with the regulator.