The U.S. Securities and Exchange Commission (SEC) announced approval of the first spot Bitcoin exchange-traded fund (ETF) on Wednesday, January 11, 2024. While this has sparked excitement from many cryptocurrency enthusiasts, it has drawn sharp criticism from others over the painfully long journey. point out.
key point
- The SEC finally approved a spot Bitcoin ETF after more than a decade of rejection, but Commissioner Hester Peirce criticized it for “wasting a decade” in the process.
- Peirce said the SEC’s actions have eroded public trust, wasted staff resources, confused understanding of the SEC’s role and “alienated a generation of product innovators.”
- She believes that if the SEC had followed its normal approval process, Bitcoin ETFs would have been allowed a few years ago without the “circus atmosphere.”
- A court ruling last August said the SEC needed a “consistent explanation” to reject the Bitcoin ETF, seemingly forcing the agency’s hand after a decade of rejections.
- Peirce praised the applicants’ “decade-long persistence” in launching a Bitcoin ETF despite obstruction from the SEC.
SEC Commissioner Hester Peirce issued a fierce dissent that focused on the unreasonable delays that preceded the ETF approval, rather than the ETF approval itself. “We wasted 10 years of opportunity to do our job,” she wrote. “If we had applied the standards we use for other commodity-based ETPs, we could have approved these products years ago.”
The first application for a spot Bitcoin ETF was filed over a decade ago, in 2013, but received a series of rejections from the SEC over the next decade. If allowed to trade on open markets, Bitcoin ETFs would have opened the door to more mainstream investments and provided simpler access for average investors.
Each time, the SEC has argued that the Bitcoin market is too unstable and prone to manipulation. But Peirce believes the agency has not provided sufficient reasoning to justify blocking approval for so long. A court ruling last August appears to have forced the SEC’s hand, directing it to provide a “consistent explanation” for any additional Bitcoin ETFs it rejects or approves.
Closed: https://t.co/tgI9yE4i83
— Hester Peirce (@HesterPeirce) January 10, 2024
In Peirce’s view, this painfully long journey would seriously undermine public trust in the SEC, waste enormous staff resources, confuse understanding of the agency’s intended role, and derail the It hindered innovation. She also believes this has created an “artificial frenzy” and a “circus atmosphere” around Bitcoin ETFs that could have been avoided by following standard approval procedures.
She also praised the “decade-long persistence” of many applicants who continued to try to launch a Bitcoin ETF despite repeated SEC rejections. Their patience finally paid off this week. But Peirce lamented the “costly legal battle” needed to overturn the SEC’s long-held position.
While the approval of a Bitcoin ETF could lead to further mainstream investment, Peirce’s dissent signals a deep distrust of the SEC’s approach that could influence future cryptocurrency regulatory decisions.
Nonetheless, many investors are celebrating the opportunity to easily access Bitcoin exposure through public markets more than a decade after these products were first offered.
