Eric Balciunas and James Seiffart, analysts at Bloomberg ETFs, said the proposed change in U.S. Securities and Exchange Commission rules could be the catalyst for the regulator to approve a spot bitcoin ETF in mid-2023.
In a tweet Thursday, Balciunas said cryptocurrency platforms could fall under the SEC’s regulatory framework if the commission approves an amendment to change the definition of “exchange” proposed in January. The rule change would amend the Exchange Law to include platforms “that make any type of securities available for trading” – presumably including cryptocurrencies – making their investment vehicles more attractive to the regulator.
“Once crypto exchanges are compliant, the main reason the SEC is denying spot bitcoin ETFs will cease to be valid, likely clearing the way for approval,” analysts say.
Balciunas and Seiffart said that under this amended definition of “exchanges,” which could be finalized between November 2022 and May 2023, the SEC may approve spot cryptocurrency ETFs, including those linked to Bitcoin (BTC). The regulator has so far rejected all rule changes to allow BTC spot ETFs to be listed on exchanges, despite the fact that some investment vehicles related to bitcoin futures were approved in 2021.
A new note on why we think spot Bitcoin ETFs will be approved in early summer 2023. The SEC proposes to expand the definition of “exchange”, which would result in cryptocurrency platforms being subject to SEC reg. After that (which could take a year) look for ETFs to get the green light via @JSeyff pic.twitter.com/TtFgFXrJ8h — Eric Balchunas (@EricBalchunas) March 24, 2022
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Many US lawmakers and industry leaders have spoken out against the Securities and Exchange Commission’s seeming hesitation about approving a spot bitcoin ETF. In November, representatives Tom Emmer and Darren Soto sent a letter to Securities and Exchange Commission Chairman Gary Gensler challenging the regulator’s reasons for not listing Bitcoin ETF shares. Bitfury CEO and former Acting Comptroller Brian Brooks also said during the December hearing that the United States is “undoubtedly” behind in approving cryptocurrency ETFs.