The long-awaited Bitcoin futures exchange-traded fund was launched this week, and this development is considered a significant achievement in acknowledging the legitimacy of the asset class. But on Monday, comments from Gary Gensler, Chairman of the US Securities and Exchange Commission, sparked various speculation that despite the futures ETF’s success, the top regulator is still not close to approving a spot Bitcoin fund.
Gensler told Yahoo Finance on Monday that more than $2 trillion cryptocurrency space still needs additional regulation to ensure investor protection. “Without editing, as I’ve told others, I think it’s really just part of the wild west,” Gensler said. said and added:
“These markets, largely around the world, do not have similar protections against fraud and manipulation, front run and other abuses, 24 hours a day, seven days a week.”
Investors in a Bitcoin futures ETF take risks through futures contracts rather than owning the coins directly. While some say the best way to invest in the asset is to buy real Bitcoin, Gensler thinks regulators are still not in the loop enough to provide adequate protection. “Most are not covered by an investor protection mandate,” Gensler told Yahoo, adding that crypto lacks the safeguards of the stock and bond markets.
Eric Balchunas, senior ETF analyst at Bloomberg, weighed in on the SEC chairman’s recent comment and dashed hopes on the possibility of a spot Bitcoin ETF. “Spot ETF applications are temporarily suspended until exchanges are further regulated by regulators,” Balchunas said in a tweet. Nate Geraci, president of the ETF Store, a Kansas-based financial advisor, agrees. “Based on these comments, it’s hard to envision the approval of a spot Bitcoin ETF until the crypto space is brought into the ‘regulatory environment’. Gensler continues to emphasize the need for investor protection for its own purposes.”