- Gary Gensler gave an amicable interview about Bitcoin ETFs.
- Some have interpreted this to mean a change of heart.
- Analysts expect a US spot BTC ETF approval this year.
The push for spot Bitcoin exchange-traded fund (ETF) approval in the US has faced strong resistance from authorities. The Securities Exchange Commission (SEC) has denied all spot Bitcoin ETF applications, going back to the Winklevoss Bitcoin Shares ETF filing in 2013.
Some crypto advocates see a US spot BTC ETF approval as crucial for legitimizing digital assets and a necessary step toward advancing the industry, leading to frustration over the SEC’s stone-walled approach. However, in a recent interview with Bloomberg, SEC Chair Gary Gensler appeared to signal a change in tone.
SEC Chair Changes Tone?
Gensler recently spoke to Bloomberg about a range of topics related to Bitcoin ETFs. He discussed not contesting Grayscale’s application to convert its Bitcoin Trust to a spot ETF and whether the SEC will approve a particular asset manager’s application first.
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However, Gensler avoided answering questions directly, choosing instead to skirt around the points made while repeatedly citing a need not to “pre-judge.” Nonetheless, giving his interpretation of the interview, YouTuber Scott Melker drew attention to a shift in Gensler’s “tone and language,” leading him to deduce that a spot Bitcoin ETF approval is near.
Melker’s reading of the interview was echoed by pro-crypto lawyer John Deaton, who stated that Gensler had the opportunity to slate Bitcoin and cryptocurrencies but did not. Deaton added that this change in tone is likely due to the agency’s mounting legal losses and the BlackRock CEO’s recent “flight to quality” comment about Bitcoin.
“I could be wrong, but I attribute it to the Court loss coupled with the Larry Fink effect. Gensler only cares about what the major incumbent donors, I mean institutions, think”, commented Deaton.
On Monday, the price of Bitcoin surged above $30,000 following the false report of a spot Bitcoin ETF approval. While ETF approval continues to split opinion, with naysayers raising concerns over institutional capture, the market reaction to the fake news indicates the potential for a significant price increase if an ETF is approved in the US.
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Although Gensler gave nothing away in the Bloomberg interview, it is interesting that the narrative surrounding BTC ETF approval has flipped from “unlikely” pre-BlackRock’s June filing to “when.”
When Bitcoin ETF?
When a Bitcoin ETF approval happens, it is subject to much debate. Bloomberg analyst Eric Balchunas recently gave 75% odds in favor of an ETF approval this year. Although it is difficult to quantify such matters, Balchunas justified the favorable odds based on the SEC’s active engagement with applicants.
Mike Novogratz, the founder of Galaxy Digital, joined Balchunas in calling for an ETF approval in 2023. He cited the SEC’s recent string of legal defeats for his call.
On the Flipside
- Critics argue that Bitcoin is too volatile and prone to manipulation for ETF exposure.
- The Jacobi FT Wilshire Bitcoin ETF is a spot BTC ETF trading on the Netherlands’ Euronext stock exchange. Others operate in Brazil and Canada. This suggests that US ETF approval may not necessarily equate to a breakthrough for the industry.
Why This Matters
During the Bloomberg interview, Gensler was tight-lipped about Bitcoin ETF approvals. However, his responses were noticeably different from previous interviews. While it would be premature to read too much into that, it’s clear that a wave of pressure is building that makes Gensler’s anti-crypto position unsustainable.
Learn more about Fidelity’s revised Bitcoin ETF application here:
Fidelity Elicits SEC Approval for Groundbreaking Bitcoin ETF
Find out the details of the Reddit mod insider trading allegations here:
Reddit Mods Dump Tokens Before Announcement, Sparking Outrage
