In a soon-to-be-published interview, Securities and Exchange Commission (SEC) Commissioner Robert J. Jackson Jr. has recently revealed he expects a Bitcoin Exchange-Traded Fund (ETF) to “eventually” be approved, as a proposal is set to satisfy all of the regulator’s requirements.
According to a tweet published by Adjunct Professor at NYU Stern Drew Hinkes, Jackson believes it’s a matter of time until a Bitcoin ETF is approved. He was quoted as saying:
Eventually, do I think someone will satisfy the standards that we’ve laid out there? I hope so, yes, and I think so. Getting the stamp of approval from the deepest and most liquid capital markets in the world is hard, and it should be. Once we make it available to everyday mom and pop investors, we are taking risks that Americans can get hurt.
Jackson’s comments back the SEC’s motives to have rejected various Bitcoin ETF proposals in the past. These are related to the cryptocurrency ecosystem’s liquidity, potential market manipulation, and custody concerns.
As covered, the SEC has rejected back in August of last year nine Bitcoin ETF proposals from ProShares, Direxion, and GraniteShares. These proposals were based in Bitcoin futures rather than being backed by “physical” Bitcoin.
The VanEck-SolidX Bitcoin ETF, which was withdrawn last month over the US government shutdown and quickly resubmitted again, is backed by “physical” Bitcoin. While the published interview excerpt doesn’t refer to this proposal, it does refer to the rejected Winklevoss Bitcoin ETF application. The SEC’s decision, at the time, stemmed from their inability to prevent fraud and market manipulation.
Commenting on it, Jackson noted that it wasn’t a difficult case, as the risk for manipulation was “enormous.” He stated:
The case that we had last year involving the Winklevoss trust, in my view, was not a difficult case. So there you had a situation where the risk for manipulation and for people getting hurt was enormous. The liquidity issues in the market were very serious.
Earlier this year Bitwise Asset Management filed another Bitcoin ETF application with the SEC, after being rejected last year. According to some analysts, an ETF will help institutional investors enter the crypto space, which would presumably lead to a rise in prices and liquidity.