International investment bank TD Cowen stated yesterday (2) that the Securities and Exchange Commission (SEC), in order to solidify its position as a regulatory authority for cryptocurrencies, is under “political pressure” to approve a physically-backed Bitcoin ETF before the January 10 deadline.
(Previous update:
Grayscale updates GBTC prospectus with SEC, Bloomberg analyst pours cold water: Lack of key information, transition to physically-backed ETF may be delayed.)
(Background:
Bitcoin physically-backed ETF uncertain? BlackRock has not yet received notification from SEC, FOX analysis on critical approval timing.)
The approval of a physically-backed Bitcoin ETF by the Securities and Exchange Commission (SEC) has entered a critical period, and investors are concerned about the developments in the cryptocurrency market in the next two weeks. TD Cowen, an international investment bank, stated yesterday (2) that due to “political demands,” the SEC will approve a physically-backed Bitcoin ETF before the January 10 deadline.
SEC needs to solidify its position in regulating cryptocurrencies
According to Jaret Seiberg, head of research at TD Cowen, the SEC’s decision to “approve” this move is due to political pressure. Before Congress considers creating comprehensive cryptocurrency legislation, the SEC needs to solidify its position as a regulatory authority for cryptocurrencies.
On the other hand, according to TD Cowen’s analysis, if the SEC refuses to approve a physically-backed Bitcoin ETF, it may face lawsuits from issuers and the risk of losing the case. TD Cowen pointed out that considering the SEC’s previous loss in the Grayscale case, the SEC will strive to avoid similar incidents. This means that the SEC may adopt a more cautious attitude in deciding whether to approve a Bitcoin ETF to avoid legal challenges and unfavorable outcomes.
Further reading:
Bitcoin physically-backed ETF gets green light? SEC Chairman Gary Gensler: Will review applications with reference to “successful results” in the Grayscale case
With only one week left until the January 10 deadline, the SEC needs to decide whether to accept or reject applications for physically-backed Bitcoin ETFs from various companies such as ARK Investment, 21Shares, BlackRock, and VanEck. TD Cowen’s analysis team remains optimistic about this.
Attention drawn to Republican-led bills
The United States is in an important period of change regarding cryptocurrency policies. In addition to the Securities and Exchange Commission (SEC) approving physically-backed Bitcoin ETFs, the past year has also focused on two key bills, which were led by Republicans and passed by the House Financial Services Committee in July.
The first bill aims to regulate stablecoins at the federal level, while the other bill takes comprehensive regulatory measures for the overall structure of the cryptocurrency market.
Further reading:
Historic First! Speaker of the U.S. House of Representatives McCarthy is removed, crypto-friendly Congressman McHenry takes over as acting Speaker
According to TD Cowen’s analysis, during the so-called “lame-duck” period (the period between elections and the inauguration of a new government), there is still a chance for the cryptocurrency market structure bill to be passed. Patrick McHenry, Chairman of the House Financial Services Committee, hopes to complete this work before stepping down, increasing the possibility of the bill being passed during his tenure. TD Cowen points out that if the cryptocurrency market structure bill cannot be passed in the current session, the stablecoin bill will become McHenry’s backup plan.
Related news
Bitcoin may drop if physically-backed ETF is approved! CryptoQuant: BTC could retest $32,000, investors and miners take profits
If I were a physically-backed ETF issuer, I would donate 1% of revenue to BTC developers! Morgan Creek founder: Market share guarantees the first position
Bloomberg analyst: Bitcoin physically-backed ETF with “cash creation” will hinder more financial institutions from entering.