Many insiders expect the Securities and Exchange Commission (SEC) to decide today whether to approve or not approve a Bitcoin Exchange Traded Fund (ETF). The possibility of a spot Bitcoin vehicle trading on the Nasdaq or the NYSE has driven the price of Bitcoin higher in recent weeks.
While the SEC was embarrassed yesterday when their X account was “compromised” and an erroneous announcement was made that Bitcoin ETFs had been approved, the odds on favorite right now is the Commission will concede and allow for these funds to trade – even though current leadership is not to happy about the prospect of a BTC ETF.
Today, CI received a comment from Yoann Lewkowitz, Head of Legal at Coincover – a “blockchain protection firm.” Lewkowitz says, like many others, a BTC ETF would drive consumer adoption of crypto.
“The BTC spot ETF approval would really mark the beginning of mass adoption. Up until now, the only way to gain exposure to this type of instrument was via a small number of exchanges that, for the most part, are offshore and lack clear regulatory supervision,” said Lewkowitz who added that the approval would pave the way for mainstream investors to participate in the market with the same ease of trading the S&P 500.
At the same time, approval will have a global impact.
“This landmark decision wouldn’t just be a win for crypto enthusiasts, it would also put pressure on other regulators worldwide. The SEC’s potential nod means Bitcoin would be sprinting into the mainstream faster than a digital gold rush, with other jurisdictions having to follow suit. With DeFi becoming embedded into TradFi, the onus is on regulators to begin moving the needle on putting the right safeguards in place to support this transition and foster greater trust around the crypto market,” added Lewkowitz.
Lewkowitz said that with any new financial instrument, there will be risks, such as volatility, which he believes is a given. At the same time, a Bitcoin ETF may drive more cyber risks:
” [a] widespread adoption of a spot-Bitcoin ETF would lead fund managers having to accumulate a large amount of Bitcoin in self-custodial or semi-custodial wallets which could become prime targets for hacks, attacks and possible human error. This will lead to higher expectations around risk mitigation and security capabilities, meaning security is paramount and must be a top priority for ETF managers.”