Updated 10 Jun, 2021

Bitcoin ETFs Face Longer Waiting Time as Gensler Damps Hopes

Bitcoin ETFs

Key Takeaways:

  • Gary Gensler says investor protection needed in cryptos before Bitcoin ETFs are approved
  • Over a dozen Bitcoin ETFs in the US have joined the waiting game

Gary Gensler Wants to See More Regulations Before Approving a Bitcoin ETF

Exchange traded funds anticipating to join in on the cryptocurrency trading frenzy could have to wait a bit longer than planned. This comes after recent comments by Securities and Exchange Commission Chairman Gary Gensler poured cold water on the possibility of approval of Bitcoin ETFs.

Gary Gensler, was sworn in as the SEC Chairman in April and is actually a blockchain expert.  He expressed his concerns over the unregulated nature of the looming cryptocurrency market in a hearing before lawmakers on Capitol Hill.

In testimony before the House of Representatives’ subcommittee on financial services, Mr. Gensler highlighted the lack of oversight of cryptocurrency-related markets. “There are many challenges and gaps for investor protection in [crypto] markets,” he said, adding “none of the exchanges trading crypto tokens has registered yet as an exchange with the SEC”.

Crypto Participants Expect Mr. Gensler to Accommodate Digital Assets

Currently, over a dozen Bitcoin ETF applications are on the waiting list for approval by the SEC. They are hoping they could cash in on the trading bonanza that has taken the world by storm this year. Crypto enthusiasts cheered on the sidelines when Gary Gensler was picked to be at the helm of the main regulatory agency.  Why? He had taught classes on Bitcoin and the blockchain at MIT in 2018.

Now, Mr. Gensler is actively pushing for Bitcoin and cryptocurrency regulations that will serve as guardrails for investors. Hopes for a rosy and easy mainstream adoption have dimmed. Moreover, since he took over at the SEC, the new chair has warned investors multiple times about crypto market risks.

Gary Gensler’s cautious view is shared by lawmakers in Washington. Elizabeth Warren, for example, has called on the SEC to implement the necessary regulations over cryptos before approving any Bitcoin ETFs.

Institutional demand for owning digital tokens is growing. The future of Bitcoin as an investable asset seems to be increasingly related to an overarching regulatory framework. The job of the Securities and Exchange Commission would be to make sure there are adequate protections for investors in cryptocurrency due to their prices being extremely volatile.

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