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Allaire noted that progress has been made in putting necessary market structures in place.
Circle CEO Jeremy Allaire has opined that the US Securities and Exchange Commission (SEC) will likely approve Bitcoin ETF applications as the market matures and addresses its concerns. Allaire noted this during his interview with Bloomberg at the World Economic Forum.
Explaining Bitcoin ETFs
Bitcoin ETFs allow investors to diversify their portfolios with Bitcoin without owning or storing it directly. The product would also provide more liquidity, transparency and regulatory oversight to the crypto market, potentially boosting its adoption and legitimacy.
While Bitcoin ETFs have been a long-awaited product in the crypto industry, the SEC has been reluctant to approve them. The regulator has expressed doubts about the reliability and security of Bitcoin custody and trading platforms. It has also cited concerns over fraud and manipulation in the Bitcoin market.
Since the first applications in 2013, the SEC has rejected all applications for the Bitcoin tracking product. However, in 2021, the SEC approved an actively-managed fund that tracks stocks with significant exposure to Bitcoin. It also approved the first US Bitcoin futures ETFs. This suggests that while the SEC may be open to crypto-related products, they need to meet certain standards and criteria.
“You have mature spot markets, well-regulated custody infrastructure, and good market surveillance,” said Allaire. Allaire noted that progress has been made in putting necessary market structures in place. This, he believes, will help gain critical approval when submitting applications to the regulator.
A New Wave of Applications
Last week, BlackRock filed for a spot Bitcoin ETF sending Bitcoin prices up. Consequently, other major investment firms like WisdomTree, Invesco and Bitwise also re-filed their previously rejected applications for the Bitcoin-tacking product.
These firms argue that the Bitcoin market has matured enough to support these products. They also note that such products would offer several benefits for investors who want to gain exposure to Bitcoin without having to deal with its technical complexities and risks.
While the regulator approved a leveraged Bitcoin futures ETF recently, it remains unclear whether it will approve any spot Bitcoin ETFs in the near future. If they do, it could be a game-changer for the crypto industry and investors alike.