International investment bank TD Cowen believes that the Securities and Exchange Commission (SEC) of the United States will approve a Bitcoin spot ETF in order to avoid litigation and defeat in the event of rejection, and to demonstrate that existing regulations are sufficient to regulate cryptocurrency.
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SEC to Approve Bitcoin Spot ETF for Political Considerations
Political Considerations
Potential Lawsuits and Defeat if Rejected
Republican-led Cryptocurrency Legislation
The Block
Citing a report from international investment bank TD Cowen, it is stated that the SEC will approve at least one Bitcoin spot ETF by January 10 for the following reasons:
Political Considerations
For political considerations, to avoid further legislation on cryptocurrency by Congress, and to strengthen the position of cryptocurrency regulators, the SEC will approve the ETF.
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The creation of separate laws seems to contradict SEC Chairman Gary Gensler’s consistent statement that existing regulations are sufficient for oversight.
Potential Lawsuits and Defeat if Rejected
TD Cowen believes that if the approval is rejected, the SEC may face lawsuits from issuers and there is a possibility of defeat. In light of the SEC’s previous defeat in the Grayscale case, the SEC will make every effort to avoid a similar incident from happening again.
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Read more: SEC’s Logical Flaw! Why the Court Found SEC’s Rejection of Grayscale Spot ETF Application Unreasonable
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January 10 is the deadline for the SEC to make the final decision on whether to approve Bitcoin spot ETF applications from companies such as ARK Investment and 21Shares. At that time, the SEC may also make rulings on other similar applications, including over ten ETF issuers such as BlackRock and Fidelity.
In addition to the attention on Bitcoin spot ETFs, the past year has also seen a focus on cryptocurrency policies led by Republicans. One bill aims to regulate stablecoins at the federal level, while another bill takes a comprehensive regulatory approach to the structure of the cryptocurrency market.
According to TD Cowen, there is still an opportunity to pass the cryptocurrency market structure bill during the “lame duck” period, which is the time between elections and the inauguration of a new government. As the Chairman of the House Financial Services Committee, Patrick McHenry, is about to step down, he would like to complete this work during his term.
If the cryptocurrency market structure bill cannot be passed, the stablecoin bill will serve as McHenry’s backup plan.
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Cryptocurrency Assets Could Become Commodities? Draft of Digital Asset Market Structure Discussion Bill to Hold Hearing Next Week
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ETF
Gary Gensler
SEC
Bitcoin spot ETF
Further Reading:
SEC Sets Final Deadline for Bitcoin Spot ETF Application Companies: 12/29
BlackRock Injects $10 Million into January Seed Fund, Analyst: Meets Predictions for January Pass