When investment giant Fidelity filed for a Bitcoin ETF yesterday, it became one of at least seven companies hoping to get approval by the US Securities and Exchange Commission (SEC).
The list of current applicants include Anthony Scaramucci’s SkyBridge Capital, the New York Digital Investment Group (NYDIG), ETF provider VanEck, and crypto index provider Bitwise. NYDIG, of course, is a subsidiary of asset management firm StoneRidge. This surging demand begs the question: Is it time to approve a Bitcoin ETF?A long and winding road
The road toward a Bitcoin ETF has been a long one. Since the Winklevoss twins first filed for a Bitcoin ETF-like trust in 2013, the SEC has repeatedly dragged its feet over the idea. It has repeatedly delayed making decisions on multiple Bitcoin ETFs over the last few years, causing firms like VanEck to pull their applications over fears the SEC would reject them.
The SEC’s main concerns about approving a Bitcoin ETF relate to the lack of transparency of trading information, market manipulation, and the notion that Bitcoin is fundamentally different from other assets it regularly deals with (for example, what happens in the case of an airdrop?). It is also worried about a lack of liquidity in the markets.
In conversation with Decrypt, Sui Chung, CEO of crypto indices provider CF Benchmarks, pointed out that in the early days, those filing for Bitcoin ETFs—such as the Winklevoss twins—were doing so from startups, albeit well-funded ones. But now the filings are coming from a new breed of applicants that are ready to meet these challenges.
“I think a lot of the areas that the SEC has previously voiced concerns around, filers [didn’t have] a lot of experience in the ETF ...