Despite lackluster Bitcoin price movements, the SEC has approved a spot Bitcoin ETF, a decision celebrated by Commissioner Hester Peirce. After more than a decade since the first spot Bitcoin ETF application, the SEC has approved multiple applications, allowing exchanges to list and trade spot Bitcoin ETPs. Peirce criticizes the SEC’s historical reluctance to approve these products, despite their success in other regulatory regimes and foreign jurisdictions. She argues the inconsistent treatment of Bitcoin-related ETP applications has damaged the SEC’s reputation, diverted staff resources, confused public perception of the SEC’s role, created unnecessary hype, and alienated innovators in the space.
Commissioner Caroline Crenshaw, who voted against the ETF, fears the decision could lead to increased fraud and manipulation in spot Bitcoin markets, potentially affecting vulnerable American households. She expresses deep concern over the approval, believing it does not serve legal or fundamental investor protection duties.
Commissioner Mark Uyeda, along with Peirce and SEC Chair Gary Gensler, voted in favor of the ETF applications. Uyeda supports the approval despite having independent reasons and preferring a rationale closer to the analysis presented in the approval order. He emphasizes the importance of transparency in the SEC’s decision-making process.
The approval marks a significant shift in the SEC’s approach to Bitcoin-based products, which have been trading under other regulatory regimes for years. Peirce’s comments highlight the long-awaited end to the SEC’s hesitation and the potential benefits for investors seeking exposure to non-security assets through ETPs.
The SEC’s decision is seen as a victory for cryptocurrency advocates and a step towards mainstream acceptance of digital assets, despite the concerns raised by dissenting commissioners.