"The expansion of the definition of a stock exchange could clear the main objection of the agency against the products by bringing cryptocurrency platforms under the regulatory framework of the Sec," wrote the analysts of Bloomberg Intelligence Etf.
The SEC last postponed its decision at the beginning of this month to decide on the proposed Bitcoin ETFs from Nydig and Global X.
"The Commission has repeatedly asked for the notification exchange to have a comprehensive agreement on joint surveillance with a regulated market of considerable size in connection with Bitcoin or can prove that other means of preventing fraudulent and manipulative actions and practices are sufficient to justify the necessary surveillance -Sharing Agreement," wrote the SEC in its decisions from March 10 to the Nydig and Global X applications. "The listing exchange did not meet this requirement here."
The SEC will not approve Spot-Bitcoin ETF without new regulation or surveillance agreements between traditional and crypto exchanges, explained Balchunas and Seyffart.
"Traditional stock exchanges like the NYSE would almost impossible to conclude such agreements with every stock exchange that Bitcoin trading offers without official regulation," they added.
"The proposal to expand the definition of an exchange would force crypto platforms to comply with the SEC rules, which would possibly clear out the supervisory concerns of the authority."
The Bloomberg analysts expect the change to be completed at some point between November 2022 and May 2023.
Fund groups agree
Leah Wald, CEO of Valkyrie Funds, said that due to the interactions of your company with the supervisory authorities, it would make sense that this is the last hurdle to be overcome.
"You said all the time that you would hesitate to put a non -regulated product in a regulated fund cover," she said block works.
"The inclusion of stock exchanges for digital assets would remove this objection and probably pave the way for a spot bitcoin ETF."
forest said that it was difficult to predict when the SEC could approve such a fund, but they do not expect the agency to do so before the next summer.
Matt Hougan, Chief Investment Officer from Bitwise Asset Management, but argued that the redefinition of a stock exchange could have a major impact, but there is a way to approve a Bitcoin ETF without this change.
The rules of the SEC do not require that the market for the underlying spot raw material is regulated and surveillance agreements are subjected to before an exchange-traded product (ETP) is approved, he said. Instead, the agency requires that there is a "regulated market of considerable size", which can be monitored in order to achieve a deputy monitoring of the market as a whole.
"We and other applicants believe that the CME-Bitcoin futures market is a 'regulated market of considerable size', and believe that we have demonstrated this in our applications," Hougan told Blockworks.
"I continue to believe that the SEC can and will approve a Bitcoin ETF before it is redefined what a stock exchange is."
Valkyrie and BitWise are among the issuers who could not approve their proposed Bitcoin ETPs. However, the SEC has approved several ETFs that invest in Bitcoin futures contracts, including one of Valkyrie.
Managers of several fund groups recently announced that they believe that the executive order from President Biden to digital assets could be an optimistic indicator of the approval of spot-bitcoin ETFs.
grayscale investments tries to convert his Bitcoin Trust (GBTC) into an ETF. There have been public comments from investors and managers from crypto companies, many of whom support the step. The SEC is expected to decide on the conversion by July after a 240-day review period.
The greatest effects of the redefinition of a stock exchange, if it occurs, would be the prospects for non-bitcoin crypto ETFs, said Hougan.
"If Coinbase were regulated and could have surveillance techniques," he noted, "could you build ETPs on a variety of crypto-assets or crypto index ETFs.
. .
The contribution is a change in the "Exchange" definition The key to Bitcoin ETF approval? is not a financial advice.
