John Deaton, a well-known figure in the cryptocurrency industry, recently offered his thoughts on SEC head Gensler’s position on bitcoin.
This comes after Gensler commented that BTC was not a security. Gensler believes that everything except bitcoin is security. Seeing Bitcoin Maxis applaud Gary Gensler’s claims that anything but bitcoin is security is unfortunate, according to Deaton.
Deaton bases his argument on the point that Gensler did not allow a spot bitcoin ETF to be traded, but did allow professional traders (investment banks) to trade futures and short ETFs.
Which ETF and why you should care
Exchange-traded funds (ETFs) provide investors with a simplified way to get exposure to bitcoin without having to buy either cryptocurrency. This simplified investment strategy eliminates the need for clients to open an exchange account or manage cryptocurrency wallets, saving them time and effort.
In conventional finance, an exchange-traded fund (ETF) is a type of investment that reflects the performance of another asset or a combination of assets. Exchange-traded funds (ETFs) provide a convenient option to invest in a wide variety of assets without having to physically own any of them.
When it comes to bitcoin, an exchange-traded fund (ETF) simply follows the bitcoin price.
An ETF (Exchange Traded Fund) that tracks the price of bitcoin allows investors to gain exposure to bitcoin price appreciation without having to go through the steps to buy bitcoin themselves (such as signing up for an exchange and through different trading techniques). check).
However, the bitcoin ETF is restricted in its own right. In October 2021, the ProShares Bitcoin Strategy ETF (BITO) became the first bitcoin exchange-traded fund (ETF). An exchange-traded fund (ETF) does not invest in bitcoin itself, but rather in bitcoin futures contracts.
Bitcoin Spot ETF Battle
Crypto firms have proposed numerous bitcoin dot ETF designs to the SEC over the years. Several companies have legitimized the Bitcoin futures ETF. Despite having two “crypto-positive” chairmen, the SEC has refused to approve a bitcoin spot ETF in the US for years.
Jay Clayton, Chairman of the SEC from May 4, 2017, to December 23, 2020, likes bitcoin as a store of value. Clayton rejected all bitcoin ETF proposals. BITO operates without SEC clearance as it is registered with 1940 Company Investment.
Gary Gensler, Clayton’s successor, authorized the ProShares BITO. Valkyrie and Van Eck ETF applications were also approved. Grayscale may launch the first Bitcoin spot ETF.
Owning the first publicly traded, SEC-approved Grayscale Bitcoin Trust (GBTC), Grayscale filed the Bitcoin spot ETF with the SEC in 2016. Due to deadlock, the group withdrew in 2017. GBTC, Like BITO, it does not require SEC clearance to commence operations. After a holding period, authorized investors can trade GBTC without a prescription.
Grayscale threatened to sue the SEC in March 2022 if its current efforts to turn GBTC into the first spot bitcoin ETF failed. The SEC argues that market manipulation is the biggest hurdle to registering bitcoin spot ETFs.
