- John Reed Stark suggested that SEC will not take a positive view of Bitcoin ETFs.
- Analysts think the ruling may be delayed even further.
Several major financial institutions have recently expressed interest in applying for Bitcoin [BTC] ETF. Companies like Blackrock, Wisdom Tree, and Valkyrie are all vying for SEC approval. This interest from the institutions created a wave of optimism in the crypto sector. Over time, however, the optimism began to wane.
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Future looks bleak
Former SEC attorney John Reed Stark suggested that the SEC is likely to remain firm against ETFs in the Bitcoin spot market, despite notable filings from Wall Street giants. The SEC-affiliated nonprofit Better Markets is strengthening its stance against spot ETFs over concerns of market manipulation and concentration in Bitcoin markets.
Better Markets highlighted concerns about spot bitcoin markets. According to them, these markets are showing inflated volumes due to manipulation and high concentration. They depend on a limited group to maintain the Bitcoin network.
They also stated that such vulnerabilities make a bitcoin-based ETF susceptible to manipulation. This in turn puts investors and the public interest at risk. They also believe that trusting supervision from other markets is insufficient.
The SEC has consistently denied Bitcoin ETF applications since 2013, citing these concerns. While ETFs are allowed in Bitcoin futures markets, applications for spot ETFs are blocked. BlackRock, the world’s largest asset manager, recently filed for a spot ETF, followed by other major Wall Street players.
Stark, on social media platform X, predicted possible shifts in SEC crypto regulation after the 2024 presidential election. He expects that if a Republican candidate wins, a GOP-led administration could take a more favorable approach to crypto, potentially triggering ETF approvals. ease.
He also predicted that SEC enforcement action could slow significantly under the leadership of a Republican majority within the agency.
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The Bitwise Bitcoin ETP Trust and spot bitcoin ETF applications from BlackRock, VanEck, WisdomTree and Invesco await a decision from the US SEC before September 1. Bloomberg analysts suggest the SEC is likely to delay any rulings. This postponement would further extend the waiting time for these applications.
At the time of writing, BTC was trading at USD 29,300 and the MVRV ratio had dropped as well. A negative MVRV ratio implied that most addresses holding BTC were not profitable at the time of going to press.
Source: Sentiment