A look back at the biggest bitcoin ETF news of 2021

[ad_1]

Many were hoping that 2021 would be the year of the bitcoin exchange-traded fund (ETF), and in some ways it was.

Although the industry ultimately failed to advance a spot bitcoin ETF through the Securities and Exchange Commission (SEC), the United States saw its first crypto ETF in the form of a commodity. in the long term.

In this article, The Block reviews the key events of 2021 to see where the issue of SEC approval for 2022 stands.

April

It all starts and ends with SEC Chairman Gary Gensler.

The US Senate confirmed Gensler in April of this year with a final tally of 53-45 – most of the tally matched parties. Gensler chaired the Commodity Futures Trading Commission (CFTC) under the Obama administration and then taught courses on topics such as digital assets and blockchain technology at MIT, leaving many in the crypto industry to hope that Gensler could be more sympathetic in his surveillance.

August

During an appearance at an event, Gensler made the powder keg of the year commentary for bitcoin ETFs.

Between discussions of currency regulation and the possibility that many tokens could be securities, Gensler slipped his take on Bitcoin ETF approvals:

“I anticipate that there will be deposits relating to exchange-traded funds (ETFs) under the Investment Company Act (’40 Act). When combined with other federal securities laws, the ‘ 40 Act offers important protections to investors, ”he said. . “Given these important protections, I look forward to staff review of these deposits, especially if they are limited to those bitcoin futures contracts traded by CME.”

It was gone for the races from that point on, with a number of companies depositing bitcoin commodities in futures.

October

Most of the move for the year took place in October, when a report from Bloomberg surfaced claiming that the SEC was not likely to block issuers of bitcoin futures deposited for 75 days previously. There is no formal green light for products deposited in this manner. Once 75 days have passed without any SEC dissent, the product is clear to list.

The industry responded enthusiastically. While the ProShares list appeared to solidify, bitcoin broke through the $ 60,000 mark as the report surfaced. ProShares broke the band on October 18, listing its ProShares Bitcoin Strategy ETF (BITO) on the New York Stock Exchange. Opening day volumes broke expectations with $ 1 billion on launch day. Valkyrie and VanEck would follow shortly thereafter as a number of others awaited approval.

With the massive October move and the many spot ETF submissions pending, the industry had high hopes for the year-end months.

November

November started off strong with a coalition of U.S. lawmakers sending a letter to Gensler on November 3 expressing concerns over why a futures-based bitcoin ETF was approved, but spot ETFs were still in the bottom line. limbo of the proposition.

That same day, the SEC issued a notice seeking comment on Grayscale’s cash ETF proposal. Still, issuers weren’t yet discouraged, with BlockFi filing a spot product proposal on November 8.

Around this time, Bloomberg ETF analyst James Seyffart tweeted Bloomberg’s then-current list of crypto ETF deposits with the SEC. This remains a fairly complete picture of the transmitters in the field. However, minor changes, such as multiple releases, have since been made.

At the time of the tweet, Seyffart said the odds of approval were low. VanEck was the first and actually received a rejection on November 12. The Commission concluded that the product did not sufficiently alleviate market manipulation issues – a passage that would appear in every post-VanEck rejection order.

Just three days after his spot product was rejected, VanEck’s bitcoin futures product would be listed.

Grayscale, which also has a product submission under SEC review, expressed concern over VanEck’s denial in a letter to the securities regulator. He claimed the SEC could be in violation of administrative procedures law if it did not approve Grayscale’s cash product because, according to the issuer, the Commission applies unequal standards between cash and futures products.

December

But the final month of 2021 started off with some hope for 2022. VanEck told The Scoop podcast that “they will be back” and intend to continue pushing for a spot bitcoin ETF. However, this was tempered by the second rejection of the year on December 2, when the SEC rejected WisdomTree’s proposal.

The SEC took all the time necessary to review the bitcoin proposals, releasing as many extensions as possible on each product. He kept the habit, based on Bitwise and Grayscale’s suggestions in the middle of the month.

The agency closed the year with two more denials, rejecting proposals from Valkyrie and Kryptoin.

The outlook for 2022

The year didn’t produce the spot product many had hoped for, but it did create significant momentum for the conversation around bitcoin ETFs.

As Grayscale’s APA argument unfolds and issuers like VanEck and WisdomTree file a new case, pressure on the SEC to better define its barriers surrounding market manipulation issues could intensify. Many, like Grayscale, will continue to ask the question: How is a futures product different from a cash product when it comes to preventing manipulative practices? And with crypto products of a kind currently trading, the SEC may now have a testing ground for crypto ETFs.

Every year, industry hopes claim to be the year of a spot bitcoin ETF approval, and although it is not clear whether 2021 has set enough progress in place for approval in 2022. , it certainly introduced enough new variables for a changing conversation.

© 2021 The Block Crypto, Inc. All rights reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial or other advice.

[ad_2]