Applications for US Bitcoin exchange-traded funds (ETFs) are piling up as new Securities and Exchange Commission (SEC) Chairman Gary Gensler weighs his options. Applicants include established financial services providers, so far the SEC hasn't approved anything though.
So far, about a dozen Bitcoin ETF applications are awaiting approval from the SEC. Firms that have submitted them include Goldman Sachs, Fidelity, Grayscale, WisdomTree and others. Behind them are a small but growing amount of Ethereum ETF applications, including those submitted by VanEck and WisdomTree in May.
The SEC has already rejected several Bitcoin ETF applications and recently delayed deciding on another. Hours before its previous deadline on April 28, the SEC said its ruling on VanEck’s filing would come in June at the earliest.
Gary Gensler's strategy
Since new SEC Chairman Gary Gensler previously taught a course on blockchain technology at MIT, many crypto enthusiasts were encouraged by his appointment. Last week, Gensler spoke before the House of Representatives subcommittee on financial services.
"There are many challenges and gaps for investor protection in [crypto]markets. [...] No cryptocurrency exchanges had yet registered as an exchange with the SEC." - Gary Gensler, Chairman SEC
He has repeatedly called for “greater investor protection” in bitcoin specifically. Additionally, the SEC’s division of investment management issued a warning to investors about crypto market risks. Both actions have left previous enthusiasts crestfallen.
Alternatives to a Bitcoin ETF
Meanwhile, the backlog in crypto ETF approvals has led eager investors to seek exposure to cryptocurrencies through other means. SEC Commissioner Hester Peirce warned that in delaying its response, investors would seek out other products. Such vehicles include crypto trusts offered by Grayscale or shares in Bitcoin-invested MicroStrategy (Ticker: MSTR).
Additionally, Canada just across the border already approved a bitcoin ETF. These crypto-based products have unleashed more than a billion dollars in global inflows. Just earlier today, ETC Group also launched a bitcoin exchange-traded product on an alternative exchange in London.
