The first spot Bitcoin exchange-traded fund (ETF) application, filed in July 2013, was denied in both 2017 and 2018. A decade has passed since that initial application, and the Securities and Exchange Commission has rejected more than a dozen additional applications and repeatedly punted the date for deciding on others.
The ETF saga’s latest iteration saw Bitcoin (BTC) jump more than 6% as industry advocates celebrated a court ruling that affirmed what we already knew — that the SEC’s rejection of Grayscale’s ETF application was “arbitrary and capricious.” This was, of course, followed by the SEC delaying its decision on all seven pending Bitcoin ETFs, and a subsequent price drop.
Now we wait as the SEC deliberates on its next move and Grayscale pleads for approval.
Related: Bitcoin ETFs: Even worse for crypto than central exchanges
To a degree, the case for a Bitcoin ETF makes sense in the spirit of adoption. The $7 trillion ETF industry is ripe with investors still on the crypto sidelines, awaiting a product that would grant them Bitcoin exposure without having to buy BTC directly and set up a wallet. Plus, as a community that’s fought long and hard to have digital assets taken seriously, the crypto world is inclined to welcome the validation that a United States spot ETF would signal.
But crypto, Bitcoin especially, is predicated on the need for an alternative financial system — one that enables the financial sovereignty, transparency and consensus that traditional finance (TradFi) so glaringly lacks. The crypto industry’s eagerness for an SEC ETF approval feels like a step backward, akin to American revolutionaries begging Parliament to intermediate colonial tax collection after rejecting its imperial rule.
$BITO has underperformed $BTC by 28% YTD. This is why we need a Spot #Bitcoin ETF. pic.twitter.com/WOtnnDgJDO
— Michael Saylor⚡️ (@saylor) September 7, 2023
Mainstream adoption is a ubiquitous goal among crypto champions, and an SEC sign-off on a BTC vehicle that resonates with TradFi is ostensibly a fast track to it. But fighting for approval from an opaque centralized agency for an…