The CEO of Bitcoin trust issuer Osprey Funds, Greg King, believes the SEC is too busy this year to deal with crypto ETF certifications.
When it comes to Bitcoin (BTC) exchange-traded funds (ETFs), the CEO of Osprey Funds, the issuer of over-the-counter Bitcoin trust OBTC, is not holding his breath that the United States would approve an ETF for the cryptocurrency this year.
Greg King, in an interview with Yahoo Finance’s Jared Blikre and Seana Smith on July 19, expressed his belief that the Securities and Exchange Commission (SEC) under the direction of Gary Gensler will have so many things on its plate in 2021 that approval of a Bitcoin ETF will be unlikely.
King recalled the excitement in the crypto industry surrounding Gensler’s appointment. While Gensler has been relatively noncommittal in his statements about crypto regulation thus far, he is well-known for his work teaching blockchain courses at the Massachusetts Institute of Technology in recent years, which has garnered widespread attention.
“You saw a flurry of filings, from established companies to sort of newcomers, chasing that Bitcoin ETF idea,” said King. The CEO has himself been in conversation with SEC staff for several years, as Osprey — the parent firm of Osprey Funds — had filed for its own Bitcoin ETF back in 2017. King argued:
“If a Bitcoin ETF is coming through the Gensler administration, my view is it’s not going to happen this year […] There’s also been quite a bit of sort of a body of language and rhetoric and points that have been made by the staff with previous applications that need to be addressed. And so this isn’t a slam dunk.”
The market’s downturn this summer may also have been influenced by disappointed expectations of a “slam dunk,” according to King, who claims that the “market is partially calibrating” to these disappointments.
The high number of Bitcoin ETF applications in the United States earlier in the year, as well as their stalling later in the year, contributed to Bitcoin’s extraordinary 2021 bull run, according to King.
However, recent hawkish regulatory remarks in the United States regarding private stablecoins have not been “particularly helpful for Bitcoin or Ethereum,” according to King.
In a letter sent this week to members of the President’s Working Group on Financial Markets — often known as the “Plunge Protection Team,” U.S. Treasury Secretary Janet Yellen stated that the government must move rapidly to build a legal framework for stablecoins.
Earlier this year, Yellen had also expressed concern about the exploitation of cryptocurrency, which she described as a “growing problem.”
Yellen’s calls have been echoed by Jerome Powell, the chairman of the Federal Reserve, who has stated that if stablecoins are to become a big part of the payments universe, “we will need an appropriate regulatory framework, which, frankly, we do not have.”
In light of this landscape — and the fact that cryptocurrency exchange-traded funds (ETFs) have already been approved in Canada, Europe, and other jurisdictions — King stated that the United States is “decidedly behind,” but that “that is obviously by choice”:
“I think they’re thinking about this, if I had to guess, more holistically, beyond just whether a Bitcoin ETF makes sense or not at this point, but really, more along the lines of what precedent are we going to set when we approve one.”