Bitcoin (BTC) Price Down 2% As SEC Delays the Decision on VanEck Bitcoin ETF Approval
After surging past $55,000 on Wednesday, April 28, the Bitcoin (BTC) price is down 2% today slipping under $54,000 levels. At press time, Bitcoin (BTC) is trading at a price of $53,879 with a market cap just over $1 trillion, as per data on WorldCoinIndex.
The latest downward pressure on Bitcoin price comes as the U.S. Securities and Exchange Commission (SEC) further postponed the approval of the VanEck Bitcoin ETF to late June 2021.
VanEck along with CBOE filed for its Bitcoin ETF application last December 2020. The SEC takes a total of 45 days to consider the approval of such an application and whether such securities should be allowed to trade. Although the current window is ending on May 3, the SEC shall be further extending the window to the end of June.
In its latest filing, J. Matthew DeLesDernier, assistant secretary at the SEC wrote: “The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the comments received”.
Note that the SEC decision can be further extended to a total of 240 days from the initial application filing date. The Bitcoin ETF basically comprises a portfolio of stocks having exposure to the world’s largest cryptocurrency instead of offering any direct exposure.
Thus, Bitcoin ETFs are usually considered as a potential instrument for institutional investors to gain exposure to Bitcoin. The U.S. is yet to approve its first Bitcoin ETF in the market. Upon arrival, the Bitcoin ETF is likely to flood massive institutional liquidity in the market.
All hopes are currently on the newly appointed SEC Chairman Gary Gensler. Approved by the Senate earlier this year, Gensler is reportedly said to be an expert in digital currencies and has been teaching blockchain at the Massachusetts Institute of Technology.
Speaking upon how the SEC should regulate Bitcoin and crypto, Gensler said that the responsibility falls across all government institutions on how they classify Bitcoin and other digital assets.
This is not the first time that VanEck has applied for a Bitcoin ETF. However, at present, along with VanEck, there are nine other active filings for Bitcoin ETF including applications from Galaxy Digital, Kryptoin Investment Advisors, Fidelity and Wisdom Tree.
Bitcoin ETFs have already made its way into the Canadian markets with formal regulatory approval. The Purpose Bitcoin ETF in Canada is the most popular and already holds over $1 billion in Bitcoin holdings since inception.
The Bitcoin ETF arrival threatens the monopoly of the Grayscale Bitcoin Trust (GBTC), the largest Bitcoin fund currently in the market.