{"id":13159,"date":"2023-09-09T10:55:43","date_gmt":"2023-09-09T10:55:43","guid":{"rendered":"https:\/\/cryptoheretostay.com\/?p=13159"},"modified":"2023-09-09T10:55:45","modified_gmt":"2023-09-09T10:55:45","slug":"10-years-later-still-no-bitcoin-etf-but-who-cares","status":"publish","type":"post","link":"https:\/\/cryptoheretostay.com\/?p=13159","title":{"rendered":"10 years later, still no Bitcoin ETF \u2014 but who cares?"},"content":{"rendered":"<script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"crypto\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script>\n<p>The first spot Bitcoin exchange-traded fund (ETF) application, filed in July 2013, was denied in both 2017 and 2018. A decade has passed since that initial application, and the Securities and Exchange Commission has rejected more than a dozen additional applications and repeatedly punted the date for deciding on others.<\/p>\n<p>The ETF saga\u2019s latest iteration saw Bitcoin (BTC) jump more than 6% as industry advocates celebrated a court ruling that affirmed what we already knew \u2014 that the SEC\u2019s rejection of Grayscale\u2019s ETF application was \u201carbitrary and capricious.\u201d This was, of course, followed by the SEC delaying its decision on all seven pending Bitcoin ETFs, and a subsequent price drop.<\/p>\n<p>Now we wait as the SEC deliberates on its next move and Grayscale pleads for approval.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Bitcoin ETFs: Even worse for crypto than central exchanges<\/em><\/strong><\/p>\n<p>To a degree, the case for a Bitcoin ETF makes sense in the spirit of adoption. The $7 trillion ETF industry is ripe with investors still on the crypto sidelines, awaiting a product that would grant them Bitcoin exposure without having to buy BTC directly and set up a wallet. Plus, as a community that\u2019s fought long and hard to have digital assets taken seriously, the crypto world is inclined to welcome the validation that a United States spot ETF would signal.<\/p>\n<p>But crypto, Bitcoin especially, is predicated on the need for an alternative financial system \u2014 one that enables the financial sovereignty, transparency and consensus that traditional finance (TradFi) so glaringly lacks. The crypto industry\u2019s eagerness for an SEC ETF approval feels like a step backward, akin to American revolutionaries begging Parliament to intermediate colonial tax collection after rejecting its imperial rule.<\/p>\n<p lang=\"en\" dir=\"ltr\">$BITO has underperformed $BTC by 28% YTD. This is why we need a Spot #Bitcoin ETF. pic.twitter.com\/WOtnnDgJDO<\/p>\n<p>\u2014 Michael Saylor\u26a1\ufe0f (@saylor) September 7, 2023<\/p>\n<p>Mainstream adoption is a ubiquitous goal among crypto champions, and an SEC sign-off on a BTC vehicle that resonates with TradFi is ostensibly a fast track to it. But fighting for approval from an opaque centralized agency for an intermediated investment product belies our industry\u2019s purpose. And frankly, it\u2019s unnecessary.<\/p>\n<p>The irony of cautious investors waiting to buy Bitcoin ETF shares rather than taking the safer route of buying BTC directly is palpable. ETFs bear many layers of counterparty risk, including the sponsor, custodian and other partners. We saw how catastrophic this type of risk can be in crypto during the latest contagion, when customers lost more than $10 billion within months because they trusted third parties. Though the contagion appears to have dwindled, the major takeaway remains: If you don\u2019t have the private keys to your Bitcoin, your assets aren\u2019t in your control, and they may not even exist.<\/p>\n<p>Those of us who witnessed the fallout up close know this. But investors who\u2019ve been waiting on the sidelines for an ETF likely do not. It\u2019s our job as industry builders and veterans to help newcomers understand the new degree of security and risk aversion that Bitcoin\u2019s technology enables.<\/p>\n<p>The downside of a spot Bitcoin ETF runs deeper than the conceptual contradiction and the unknowing purchases of a riskier investment. The potential cost for the crypto movement is immense.<\/p>\n<p>Take, for example, BlackRock\u2019s iShares Bitcoin Trust, the announcement of which drove Bitcoin\u2019s price to a one-year high in June. However, perhaps blinded by the prospect of monumental institutional inflows, much of the Bitcoin community, myself included, has thrown its support behind BlackRock\u2019s iteration of TradFi 2.0, haphazardly disguised as Bitcoin conviction.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>An ETF will bring a revolution for Bitcoin and other cryptocurrencies<\/em><\/strong><\/p>\n<p>Buried within BlackRock\u2019s submission is a clause on hard forks. It states:<\/p>\n<p>The Sponsor will [\u2026] use its discretion to determine which network should be considered the appropriate network for the Trust\u2019s purposes, and in doing so may adversely affect the value of the Shares. [&#8230;] There is no guarantee that the Sponsor will choose the digital asset that is ultimately the most valuable fork. [\u2026] The Sponsor may also disagree with Shareholders, the Bitcoin Custodian, other service providers, the Index Administrator, cryptocurrency exchanges, or other market participants on what is generally accepted as Bitcoin and should therefore be considered \u2018bitcoin\u2019 for the Trust\u2019s purposes, which may also adversely affect the value of the Shares as a result.<\/p>\n<p>That clause basically introduces ambiguity around the consensus mechanism for a protocol that already has a very well-defined and battle-tested mechanism.<\/p>\n<p>On a broader level, BlackRock will undoubtedly amass an enormous Bitcoin supply, while its iShares ETF may be subject to opacity and possible rehypothecation. This puts shareholders at risk of having only a paper claim to Bitcoin that\u2019s been lent out, instead of the asset itself. It\u2019s one thing to have accepted this scenario pre-Bitcoin, but it\u2019s deeply unsettling to imagine this becoming the norm in a world where we have the opportunity to own Bitcoin on a transparent and immutable ledger.<\/p>\n<p>As the coexistence of decentralized finance and TradFi becomes more of a reality, it is inevitable that the SEC will, at some point, approve a spot Bitcoin ETF. While this isn\u2019t innately bad, it\u2019s critical for the Bitcoin community to remain cognizant and committed to the reasons we\u2019re building a new financial system.<\/p>\n<p>We can and should embrace legacy institutions\u2019 adoption of Bitcoin and the undoubted intertwining of traditional investment vehicles and Bitcoin. But we also need to remain vigilant about the implications of developments like spot ETFs, help market newcomers understand the novelty of Bitcoin\u2019s technology, and keep moving forward.<\/p>\n<p><strong>Joseph Kelly <\/strong>is the CEO of Unchained, a Bitcoin financial services company he co-founded in 2016. He\u2019s a graduate of the Texas McCombs School of Business.<\/p>\n<p class=\"post-content__disclaimer\"><em>This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are the author\u2019s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.<\/em><\/p>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><br \/>\n<br \/><script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"bitcoin\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script><br \/>\n<br \/><a href=\"https:\/\/cointelegraph.com\/news\/10-years-later-no-bitcoin-etf\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The first spot Bitcoin exchange-traded fund (ETF) application, filed in July 2013, was denied in both 2017 and 2018. A decade has passed since that initial application, and the Securities and Exchange Commission has rejected more than a dozen additional applications and repeatedly punted the date for deciding on others. The ETF saga\u2019s latest iteration [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":13160,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_wp_rev_ctl_limit":""},"categories":[2],"tags":[],"class_list":["post-13159","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bitcoin-news"],"_links":{"self":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/13159","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=13159"}],"version-history":[{"count":1,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/13159\/revisions"}],"predecessor-version":[{"id":13161,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/13159\/revisions\/13161"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/media\/13160"}],"wp:attachment":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=13159"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=13159"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=13159"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}