There have been some new developments in the long-running quest to have a Bitcoin Exchange Traded Fund (ETF) approved by the United States Securities and Exchange Commission (SEC). Coinbase, a top crypto exchange that has a famously tumultuous relationship with the SEC, has signed on to be the Surveillance Sharing Agreement(SSA) counterpart for the Chicago Board Options Exchange (CBOE) ETF applications.
This move brings the industry’s dream of having an ETF approved one step closer to reality and this was reflected in the price of Coinbase’s stock, which shot up. But what would this approval, if it happens, mean for the industry?
First, it would mean an inflow of investments. It’s worth noting that there are already ways to invest in crypto. After all, crypto exchanges already exist. But a Bitcoin ETF will be a major way to secure institutional investment for the industry.
Traditional stocks and top investment vehicles already have ETFs that they are attached to and this drives billions of dollars into their respective industries each year. If the crypto industry can do the same, it could potentially reap the same benefits and everyone from individual users to companies in the space would be better off.
This comes down to more visibility. As much as the crypto space has made immense progress in the last decade, a lot of the money is still in the hands of mainstream investors. And mainstream investors are more likely to know about ETFs traded on a major exchange than the latest altcoin.
This move could also mean more price stability for Bitcoin and other tokens. The industry is infamous for its volatility but increased mainstream visibility and better regulation could lead to more price stability.
This, experts say, is even more true in the case of spot ETFs. Price stability for Bitcoin can be very beneficial not only for those who trade speculatively but also for those who use crypto for more ‘domestic’ purposes such as those who use crypto gambling sites, store their savings in crypto, use crypto to make everyday payments, and much more.
As the crypto industry matures, more consideration will need to be given to those who use crypto for non-speculative reasons and an ETF could be a step in the right direction. The ETF could also help mitigate the long-running contention between the SEC and the industry.
From investigations during the ICO craze to the endless lawsuits that the SEC has filed against crypto businesses, the two have been at odds for a while. But should the SEC approve the Bitcoin ETF, it will not only mean the fulfilment of a goal that has been many years in the making. It could also mark the start of a better relationship between the SEC and the industry even as the biggest crypto in the world comes under better and more thorough regulation.
