Digital Assets: Gary Gensler Reaffirms Preference For Futures-Based Bitcoin ETFs

September 30, 2021 | Digital Assets, News
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The SEC Chairman cited the significant investor protection available in a 1940 law for mutual funds and ETFs.

In prepared remarks for the Financial Times’ “Future of Asset Management North America Conference,” SEC chair Gary Gensler reiterated his preference for a futures-backed bitcoin ETF, and pointed to a number of open-ended mutual funds that took exposure to bitcoin futures traded on the Chicago Mercantile Exchange. (MARKETS INSIDER)

It’s all about regulation and investor protection

The so-called ‘40 Act “provides significant investor protections,” he remarked. “I look forward to staff’s review of such filings.”

The SEC has received a number of applications for bitcoin ETFs that would invest in the cryptocurrency, not its derivative futures contracts. The regulator has shown no signs of urgency in reaching its decision, even while its Canadian counterpart has not hesitated to approve crypto ETFs.

In fact, Canada has gone a step ahead – the Evolve Cryptocurrencies ETF, which holds both bitcoin and ether – began trading on the Toronto Stock Exchange on Wednesday. It is Canada’s first multi-cryptocurrency ETF.

However, on Monday, while speaking at the Code Conference in Beverly Hills, California, Gensler warned that U.S. cryptocurrency markets and related platforms would “not end well” if they remained outside the purview of regulators.

“There’s trading venues and lending venues where they coalesce around these, and they have not just dozens but hundreds and sometimes thousands of tokens on them,” Gensler said, as quoted by Bloomberg. “This is not going to end well if it stays outside the regulatory space.”

Bitcoin rises on Gensler’s support for a futures bitcoin ETF

Bitcoin has jumped higher from its lows around $41,000 today, and is currently trading at $43,040, up over 2% over a 24-hour period.

Related Story: Invesco And Galaxy Digital To Partner On Crypto ETFs

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