Gary Gensler, chairman of the US Securities and Exchange Commission (SEC), spoke dismissively about spot Bitcoin ETFs in a conversation with Bloomberg on December 13.
Gensler’s SEC today introduced new rules intended to reduce risk in the U.S. Treasury market. According to Reuters, these rules will require a greater number of transactions to go through clearing houses and will, among other things, introduce collateral requirements for central clearing houses.
After Gensler talked about the level of leverage in the Treasury markets, Bloomberg reporter Kaily Leinz turned the conversation to the multiple spot Bitcoin ETF filings pending with the SEC. Gensler smiled before saying:
“…There is something very important about the $26 trillion dollar Treasury market, which is essentially the foundation of our entire capital market. It’s how we finance our government, it’s how our Federal Reserve conducts monetary policy, it’s how we maintain the dominance of the dollar around the world, and do you want to ask me about crypto?”
Gensler downplayed the importance of crypto ETFs in comparison, stating:
“Crypto securities are not only much smaller, [they’re] not how we finance our government, [they’re] not how we conduct monetary policy, and for many investors, they’re being harmed in that market… and they’re being harmed because there’s too much non-compliance.”
Despite repeatedly emphasizing the significance of the new government bond market policy, Gensler ultimately acknowledged that several spot Bitcoin ETFs are under consideration. He said “somewhere between eight and a dozen” of these applications are pending, adding that staff from several divisions are responding to these findings.
Gensler also acknowledged a court ruling that was suggested to be one requiring the SEC to casually consider Grayscale’s ETF conversion application.
Gensler did not comment on approval chances.
Gensler did not address the Bloomberg interviewer directly Kailey Leinz‘s question, which asked whether the SEC’s current level of involvement is a sign of progress.
The SEC met with many potential Bitcoin ETF applicants in late November and met with others in December. Several applicants, including BlackRock, have submitted numerous amendments. Many discussions center in part on comparisons between cash and in-kind redemption and creation methods, a distinction that will determine whether some ETF participants can trade crypto.
Despite Gensler and the SEC’s silence on whether a Bitcoin ETF could be approved soon, some industry members are hopeful. Bloomberg ETF analysts Eric Balchunas and James Seyffart have suggested that there is a 90% chance that a spot Bitcoin ETF will be approved by January 10, 2024.
