Whilst it seems frustrating that the SEC keep rejecting these Bitcoin ETF proposals as its pulling the markets down, we need to see this as a part of a bigger picture. Overall, it’s not entirely a bad thing as perhaps the SECs decisions are evidence that the markets aren’t ready for a Bitcoin ETF yet anyway. Surely, it’s better to take time with these things in order to get them right first time, instead of rushing into an approval?
Or, are they simply just rushing into rejections?
Indeed, this is a sentiment discussed by Brian G. Sewell, the founder of Rockwell Capital and a bit of an expert when it comes to crypto. According to Vanillaplus:
“I would rather see the SEC make a methodical decision, with thoughtful guidelines, to approve a cryptocurrency ETF than a rash decision to reject one.”
Either way, the outcome is the same. It seems that the SEC are taking their time to make the final decision, which in turn is important because we don’t want them to approve an ETF at the wrong time do we?
As we have seen over the past few weeks, the delays and rejections are starting to take their toll on the community, especially in the United States, according to Sewell:
“I think the US investment community will not rest until they satisfy SEC criteria for a bitcoin ETF. Approval would represent another milestone in the validation of cryptocurrencies. This bodes well for the global financial system, because cryptocurrency promises to create financial savings and societal benefits — by streamlining how the world transacts for goods and services, updates mutual ledgers, executes contracts, and accesses records.”
But, we can’t expect to see approval, until regulation becomes more prominent:
“Demand is mounting for a larger, more comprehensive U.S. and global regulatory framework that protects consumers and nurtures innovation. Those institutional investors who are assessing the cryptocurrency risk/reward proposition are also awaiting regulatory guidance and protections to honor their fiduciary duties. Effective cryptocurrency regulation requires a nuanced set of rules, a sophisticated arsenal of policing tools, sound protocols, and well-trained professionals. I think U.S. regulators will eventually get it right. And if institutions become more confident that regulations can help them meet fiduciary duties, even small cryptocurrency allocations from reputable organisations could unleash a new wave of investment.”
The take home message
The important thing to note is that these rejections are not necessarily a bad thing. If anything, this is only going to encourage fair and decent regulation, which in turn will eventually lead to the approval of a Bitcoin ETF.
Which will then lead to a spur of institutional investment.
Which will then lead on to???