Securities and Exchange Commission (SEC) Hester Peirce continued to advocate that the regulator approve a Bitcoin Exchange Traded Fund (ETF) during an appearance at an online conference “The B Word” on Wednesday.
A Bitcoin ETF in the US would allow retail investors to get exposure to Bitcoin without going through the cumbersome processes of buying and securing the cryptocurrency.
While many commissioners are suspicious of the cryptocurrency market, Peirce earned the title “Crypto Mom” because she believes the US is long overdue to approve a Bitcoin ETF. In particular, she received praise from the community for her highly worded disagreement on rejected Bitcoin ETF applications. This year it also put forward a “Safe Haven” proposal, originally made in 2020, which gives crypto startups a three-year grace period to be decentralized and meet other criteria before being fully subject to US securities laws will drive innovation.
When asked today whether Peirce should move forward with a Bitcoin ETF, Peirce cited Canada’s approval of both a Bitcoin and an Ether ETF as an example that the United States could follow. In fact, several Bitcoin and Ether ETFs (the native currency of Ethereum) have been operating in Canada for several months.
“I never thought I’d be in this situation where we haven’t approved one thing and other countries are moving forward,” said Peirce.
Peirce also noted her concern that the crypto industry is being forced to play by a different set of rules than everyone else and potentially exceeding its remit. “We’re not a performance regulator, so we shouldn’t be deciding whether something is good or bad, an investor thinks about their entire portfolio and sometimes we just think about a single product line and we forget that people are building portfolios.”
The SEC regularly denied Bitcoin ETF applications during the first crypto boom in 2017 and 2018 on the grounds that the market was vulnerable to fraud and manipulation. However, over the time the industry has matured, regulated derivatives markets have evolved and institutional custodians have been created, which has resulted in more professional investors entering the space. Additionally, the SEC has a new chairman, Gary Gensler, who has been positive about Bitcoin in the past.
Given the recent bull market, applications are picking up again. To date, however, the SEC has delayed ruling on all of the filings it currently has.
Additionally, given the recent decline in Bitcoin price – it’s down nearly 50% from its all-time high of over $ 64,000 in April – the SEC may not feel the same urgency it felt a few months ago.