Peirce, nicknamed ‘Crypto Mom’ by the crypto community, is an advocate for a crypto ETF and tries to pursue the SEC to approve a Bitcoin ETF soon. With the Van Eck ETF on the line in February 2019, a decision has to be made by the SEC whether they want to accept a Bitcoin ETF now, or not just yet.
“Don’t hold your breath. I do caution people to not live or die on when a crypto or bitcoin ETF gets approved. You all know that I am working on trying to convince my colleagues to have a bit more of an open mind when it comes to [crypto]. I am not as charming as some other people.”
A Bitcoin ETF could certainly increase the liquidity of the dominant cryptocurrency in the U.S. market as it would allow both institutional and retail investors to securely and efficiently invest in the asset class without running in conflict with local regulations.
Already in July, Peirce dissented from the decision of the SEC to reject the Bitcoin ETF filed by the Winklevoss Twins. She then argued that officials not only erred in denying the Winklevoss ETF but also exceeded the limited scope of the agency’s role in regulating securities markets. Specifically, she alleged that the agency allowed the state of the underlying bitcoin spot markets to carry too much weight in how it ruled on the Winklevoss Bitcoin Trust.
She then said:
“The Commission’s mission historically has been, and should continue to be, to ensure that investors have the information they need to make intelligent investment decisions and that the rules of the exchange are designed to provide transparency and prevent manipulation as market participants interact with each other. The Commission steps beyond this limited role when it focuses instead on the quality and characteristics of the markets underlying a product that an exchange seeks to list.”
The ETF filing of VanEck, which has gained significant anticipation from investors in the market primarily due to the decades-long track record of VanEck in the traditional finance sector, uniquely uses the over-the-counter (OTC) market to base the price of cryptocurrency its ETF supports.
“I think there’s a lot of promise in cryptocurrencies and in this new technology and so I’m excited to see what happens with it, but of course I’m not going to take a position on which aspect will be successful or not.”
Institutionalization Will Happen
During a fireside chat with Erica Williams, a partner in the government, regulatory and investigations group of Kirkland & Ellis, the world’s highest grossing law firm, Peirce said institutionalization “will happen,” but cautioned people to lower their expectations about an upcoming approval timeframe for a crypto ETF. The timeframe could extend for decades.
“You all know that I am working on trying to convince my colleagues to have a bit more of an open mind when it comes to [crypto]. I am not as charming as some other people,” Peirce said.
Over the last year, Cryptocurrency companies across the globe are pushing it hard to get a Bitcoin ETF approval. However, the SEC has remained absolutely firm about its call on issues of market manipulation. Reiterating his stand, last month, chairman of the U.S. Securities and Exchange Commission (SEC) said that he still has a few worries before getting “comfortable” with the investment product.
Clayton remarked during the ongoing Clayton remarked during Consensus: Invest conference in Manhattan. He further added:
“What investors expect is that trading in the commodity that underlies that ETF makes sense and is free from the risk of manipulation. It’s an issue that needs to be addressed before I would be comfortable.”
And while the SEC is in no rush to approve an ETF, Wall Street heavyweights are lining up with new crypto products and platforms. Nasdaq Ventures and Fidelity Investments participated in a $27.5 million round of funding for new cryptocurrency exchange ErisX following the close of its first round of funding in October. That round included participation from investors TD Ameritrade Holding Corp, Cboe Global Markets and private equity firm Valor Equity Partners.