By Josiah Wilmoth
The president of the New York Stock Exchange (NYSE) said that he does not believe regulators would approve a bitcoin-based exchange-traded fund (bitcoin ETF) in the near future.
Bitcoin ETF Launch ‘Not Imminent,’ Predicts NYSE President
Investors anticipating the launch of the first bitcoin ETF received some bad news on Thursday.
Thomas Farley, who oversees the NYSE, said that he did not believe that the Securities and Exchange Commission (SEC) would approve a bitcoin ETF for “a while.”
“I saw a message that said this is not a mature asset class in the vein of the U.S. dollar or gold,” the president of NYSE Group Inc. said in a Thursday interview with Bloomberg Television at the World Economic Forum’s annual meeting in Davos, Switzerland. “If I had to guess, it’s a while. I don’t have timing, but it is not imminent.”
Intercontinental Exchange (ICE), the operator of the NYSE, had sought to list multiple bitcoin ETFs on NYSE Arca, and CBOE — the first US exchange to list bitcoin futures — has expressed its desire to create more cryptocurrency derivatives as well.
SEC Gives Bitcoin ETF Sponsors the Cold Shoulder
However, as Farley alluded in his comment above, SEC Investment Management Division Dalia Blass sent a letter to two industry trade groups on Jan. 18 expressing reservations about proposals to create retail-focused bitcoin ETFs.
In the letter, which was addressed to the heads of the Investment Company Institute and the Securities Industry and Financial Markets Association, Blass said that the SEC is concerned about a number of “significant investor protection issues” for which the agency says fund sponsors must provide satisfactory answers before they will be allowed to list a bitcoin ETF.
“[T]he innovative nature of cryptocurrencies and related products, as well as their expected use and utility in our financial markets, means that they are, in many ways, unlike the types of investments that registered funds currently hold in substantial amounts,” Blass wrote.
A week earlier, bitcoin ETF sponsors had begun withdrawing their proposals, purportedly at the request of SEC regulators.
The agency had even forced the first two blockchain ETF sponsors to remove the world “blockchain” from their names, although both funds have been allowed to begin trading without changing their investment mandates.
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