Bitcoin ETFs Under Reevaluation: Gensler’s SEC Updates Approach

The U.S. Securities and Exchange Commission (SEC) under Chair Gary Gensler is contemplating a potential paradigm shift in its approach to spot Bitcoin exchange-traded funds (ETFs). Gensler recently hinted at the SEC’s reevaluation of “between eight and a dozen filings” for Bitcoin ETFs, signalling a departure from its previous stance.

Gensler’s Statements and SEC’s Rethinking

In a recent interview with CNBC, Gensler intimated that the SEC is reconsidering its stance on spot Bitcoin ETFs. The decision follows the influence of recent court rulings in the District of Columbia, possibly reshaping the regulatory landscape for such investment vehicles.

SEC Chair Garry Gensler commented on @CNBC about SPOT #Bitcoin ETF.

How they have been denying a dussin of these ETFs in the past, but now BlackRock… I mean Courts in DC have intervened and now the SEC have to reprocess these ETF applications again.

Remember what I… pic.twitter.com/QrD42zaLIo

— Seth (@seth_fin) December 14, 2023

Historically, the SEC has harboured reservations and hesitated to greenlight these ETF proposals, citing various apprehensions. However, Gensler’s allusions to potential alterations in the SEC’s perspective are linked to judicial input.

While he did not explicitly mention the Grayscale case, there seems to be a connection. Earlier this year, Grayscale secured a legal victory against the SEC, prompting a reassessment of its application to transform its Bitcoin trust into an ETF. Notably, the SEC did not contest this decision.

Optimism Amid Regulatory Conversations

The positive strides made by Grayscale, among other entities vying for ETF approval, have stirred optimism within the market. Analysts from Bloomberg, James Seyffart and Eric Balchunas, highlighted ongoing discussions between the SEC and Grayscale, indicating a potential collaborative effort to achieve regulatory compliance.

The race for a Bitcoin ETF has attracted a diverse array of participants, including prominent asset managers like BlackRock. The SEC is expected to rule on proposals from ARK and 21Shares by January 10, elevating anticipation within the industry.

While Bloomberg analysts estimate a 90% chance of approval, former SEC staffer John Reed Stark remains sceptical, branding such optimism as “absurd.”

Also Read: SEC Chair Gensler’s X Post Fuels Speculation Of Spot Bitcoin ETF Approval