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The past week brought us big news that could influence how the US financial institutions are regulated and, consequently, how the use and trading of bitcoin are regulated. On November 16, Jay Clayton, the chairman of the SEC (Securities Exchange Commission) under the Trump administration, has announced that he will be stepping down from his position by the end of the year.
The Bitcoin enthusiasts are particularly invested in the actions of the SEC, since it’s the body that, in a great measure, has control over what a Bitcoin owner can and can not do. The BTC people have not been very fond of Jay Clayton during his tenure for various reasons, first and foremost that he wouldn’t approve the crypto ETF (Exchange Traded Fund).
Cryptocurrency and ETFs are two of the hottest investment areas at the moment and it seems only natural that the two should join together sooner or later. Combining Bitcoin with a powerful investment instrument such as ETF would create a simple and easily understandable way for trading or investing into the price of the Bitcoin on the same market that most of the investors already have a lot of experience with.
Trading shares of Bitcoin ETF on the traditional stock exchange would decrease the need for the traditional way of investing in Bitcoin. Some aspects of buying the BTC on the exchange, such as Bitcoin addresses and wallets can be confusing to newbies.
In addition, some security concerns and apparent need for self-education on cryptocurrencies often drive some investors away. Bitcoin ETF would remove most of these concerns and make trading or investing in Bitcoin as easy as dealing with oil or Gold. The shares of bitcoin ETF would be traded the same way you would trade thef shares of Tesla, or Apple.
However, while Clayton didn’t approve crypto ETF, he wasn’t very aggressive in going after Bitcoin and other virtual currencies. He didn’t, as he could, consider the Bitcoin security which would give him the power to fully regulate it on behalf of the government. Rather, he recognized, as he said in last week’s interview on CNBC, the BTC as a sort of countermeasure people use against the inefficiencies of the payment systems.
The new chairman of the SEC won’t be known for quite some time. However, Joe Biden’s appointment of Gary Gensler as the person in charge of the financial transition team puts the former head of CFTC (Commodity Futures Trading Commission) in a clear front-runner position. The former Clinton and Obama finance official comes from the more liberal and left-leaning side of the political specter, but it probably won’t influence his stance on Bitcoin much. Gensler used to teach at MIT, among other things, on Bitcoin and has a pretty much full understanding and familiarity with the cryptocurrency issues, so we can expect the Bitcoin ETF to get more serious consideration under the new administration.
In September, the first Bitcoin ETF was launched on the Bermuda Stock Exchange and it could serve as a trial run before the ETF would be listed on the US Stock Exchange. Lately, Bitcoin has been getting endorsements from more and more respectable financial institutions , companies, and individuals. As the BTC nears full mainstream recognition, the main obstacle to Bitcoin ETF, fear of manipulation, could become a thing of the past. Most of the Bitcoiners believe that it’s only a matter of time before we get the first US Bitcoin ETF.