This morning, 10th of January 2024 (U.S. time), the US Securities Exchange Commission (SEC) approved the first Bitcoin exchange-traded funds (ETFs) to be listed.
That is bad news or good news for investors who own assets in the US financial market. Now let’s learn more about it through the following FinFan article.
In his announcement, the chairman of the Securities Commission mentioned: "We are now faced with a new set of filings similar to those we have disapproved in the past. Circumstances, however, have changed. The U.S. Court of Appeals for the District of Columbia held that the Commission failed to adequately explain its reasoning in disapproving the listing and trading of Grayscale's proposed ETP (the Grayscale Order).
The court therefore vacated the Grayscale Order and remanded the matter to the Commission. Based on these circumstances and Those discussed more fully in the approval order, I feel the most sustainable path forward is to approve the listing and trading of these spot bitcoin ETP shares."
We can see in this statement that Gary Gensler's approval of this fund was because the previous refusal was not approved by the Court of Appeals for the District of Columbia and did not come from a voluntary decision.
It can be seen that his reluctance to make this decision comes from two reasons:
Also in that speech, Gary Gensler affirmed: “Importantly, today’s Commission action is cabined to ETPs holding one non-security commodity, bitcoin. It should in no way signal the Commission’s willingness to approve listing standards for crypto asset securities.
Nor does the approval signal anything about the Commission’s views as to the status of other crypto assets under the federal securities laws or about the current state of non-compliance of certain crypto asset market participants with the federal securities laws. As I’ve said in the past, and without prejudging any one crypto asset, the vast majority of crypto assets are investment contracts and thus subject to the federal securities laws”.
The above statements show that turning Bitcoin or cryptocurrency into an investable commodity will make it easier for the Securities Commission to make decisions for them when at this time, they only need to grasp the legality of the companies issuing the fund and no longer need to worry about cryptocurrency market manipulation or decentralized trading issues.
At the end of the speech, Gary Gensler presented his concerns about legal issues as well as price manipulation of current cryptocurrencies: “Though we’re merit neutral, I’d note that the underlying assets in the metals ETPs have consumer and industrial uses, while in contrast, bitcoin is primarily a speculative, volatile asset that’s also used for illicit activity including ransomware, money laundering, sanction evasion, and terrorist financing”.
At the same time, always confirm to investors that they will be responsible for their investments related to cryptocurrency: “While we approved the listing and trading of certain spot bitcoin ETP shares today, we did not approve or endorse bitcoin. Investors should remain cautious about the myriad risks associated with Bitcoin and products whose value is tied to crypto”.