Two U.S. Congressmen Ask The U.S. SEC Chairman to Approve Spot Bitcoin ETF

04. Nov 2021 Posted by Akolkar B on News

Just as the U.S. Securities and Exchange Commission (SEC) approved the Bitcoin Futures ETF two weeks back, the demand for spot Bitcoin ETF has already started soaring.

Interestingly, this time the demand is coming from two U.S. Congressmen - Tom Emmer (MN-06) and Darren Soto (FL-09). In a letter to the U.S. SEC Chairman on Wednesday, November 3, proposed for the approval of the spot bitcoin exchange-trade fund (ETF) in the United States.

In the letter, the two Congressmen wrote: “We question why, if you are comfortable allowing trading in an ETF based on derivatives contracts, you are not equally or more comfortable allowing trading to commence in ETFs based on spot Bitcoin. Bitcoin spot ETFs are based directly on the asset, which inherently provides more protection for investors”.

The lawmakers said that the investors prefer spot Bitcoin ETF over the futures-linked Bitcoin ETF since the former offers direct exposure to the world’s largest cryptocurrency. To make their argument stronger, the made the comparison to the gold spot and futures ETF market.

While the futures gold ETF DB Gold Fund (DGL) has traded only $50.4 million over the last fifteen years, the spot-based gold ETF SPDR Gold Trust (GLD) have traded more than $55 billion.

Furthermore, the two congressmen made an important point stating that the existing Bitcoin Futures ETFs track the pricing index provided by CME CF Bitcoin Reference Rate (BRR)gets near 905 of their data from exchanges like Coinbase, Kraken, and Bitstamp. The two Congressmen noted that any concerns of any fraud and manipulation at these exchanges can further extrapolate to Bitcoin futures ETFs.

The letter noted: “For this reason, whether one, both, or none of these requirements has been met, the SEC should no longer have concerns with Bitcoin spot ETFs and should show a similar willingness to permit the trading of Bitcoin spot ETFs”.

The recent proposal coming from Congressmen shows that even the lawmakers are getting comfortable with the Bitcoin derivative products. During her recent interview to CNBC, Wyoming’s Republican Senator Cynthia Lummis expressed confidence in Bitcoin noting that it is here to stay.

Lummis noted: “I do think that Bitcoin is here to stay, and I do think that a lot of others are not. The fact that Bitcoin is fully decentralized, and that some of these others were issued by a person or an entity that kept a large block of the coin for themselves and then issued others to participate, means they look more like a security than a commodity. Bitcoin is clearly a commodity…Bitcoin is the standard. It is digital gold”.

After hitting its all-time high of $66,000 two weeks back, the BTC price has been largely consolidating at around $63,000 levels. Analysts have been bullish for the BTC price to touch $100K by the end of this year.