Bitcoin enthusiasts are going to have to wait until September for a verdict on the USA’s first Bitcoin ETF, as the Securities and Exchange Commission (SEC) stalled its decision last night. Direxion is the company behind the ETFs that are awaiting approval in the next SEC hearing on September 21st, but there are plenty more in the queue waiting for approval. Europe has had several Bitcoin ETFs dating back as far as 2015, and a few Ethereum ETFs dating back to 2017. Investment and tax regulations make it difficult for American investors to put their money into European ETFs on European exchanges, hence why US investment management firms are clamoring for their own Bitcoin ETF.
Not Much Longer Left to Wait
Direxion submitted plans to list five Bitcoin ETFs on the NYSE ARCA exchange back in January of this year. By US law, the SEC has to give a verdict on the application within 120 days, which was yesterday. However, there is a clause that states if more time is required to reach a conclusion they are allowed to postpone the decision for a further 60 days, leaving the final ruling date as September 21st. The date cannot be postponed further beyond this September date, but even this initial delay could be a sign of trouble. If the SEC is still unsure, they could decline the application to get more time to deliberate over the ETF, however this is an unlikely scenario.
What is the NYSE ARCA?
The NYSE ARCA is America’s first fully electronic exchange designed to list and trade ETFs, along with small to medium cap equities. It is fully automated exchange and this gives traders the ability to close trades at better prices, as there is no waiting for a human to input price updates. It is just one of the many exchanges in the US, but is favored by ETF and providers and is why Direxion is attempting to list a Bitcoin ETF there.
America is Playing Regulatory Catch-Up
Europe has had several Bitcoin ETFs for a number of years and the US is playing regulatory catch-up once again. In theory, the US could simply base their new ETF regulations and adoption process on that created by Europe – and then tweak accordingly to American laws. This would help to save significant time and delays, as well as get more institutional money into the crypto world. There are few benefits of a US Bitcoin ETF, mainly being that American investors struggle to gain access to European stocks, and these European Bitcoin ETFs aren’t listed on any American trading platform – such as Robin Hood and TD Ameritrade. A US Bitcoin ETF would remove this issue and help reams of money flood into the crypto world.
While there is a slim chance the SEC could decline the application for an American Bitcoin ETF, it is an unlikely scenario at this point. There is a lot of hype and buzz around the US getting an ETF in the crypto community, Many feel that it will cause a huge spike in the price of Bitcoin, similar to that of gold when it first got an American ETF. All we can do for now though is cross our fingers and wait until September 21st.