U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler steered clear of discussing cryptocurrencies during a meeting centered on the U.S. Depository market, sidestepping a reporter’s query on the status of spot bitcoin ETF applications.
Gensler’s response came during an appearance on Bloomberg TV, where he emphasized the significance of the $26 trillion Depository market and downplayed the overall importance of crypto assets. “The U.S. Depository market is a very heavy and significant market. Crypto assets are not just much smaller; they’re not the way that we store our wealth,” he stated.
In response to the reporter’s inquiry regarding spot funds, Gensler declared, “It’s not how we conduct monetary policy.” He further highlighted the potential harm faced by investors in the crypto market due to non-compliance with securities regulations and other guidelines.
The SEC is currently reviewing more than a dozen applications for the first spot bitcoin fund in the country, including proposals from prominent asset management companies like BlackRock and Fidelity.
Speculation surrounding an imminent decision has contributed to the recent surge in the price of bitcoin, the world’s largest digital currency by market capitalization.
At 2:45 p.m. ET on Wednesday, its price increased by 4.1% to $42,802.
Gensler Avoids Direct Answers on Spot Bitcoin ETFs
When questioned about the ongoing review process for spot bitcoin funds last month, Gensler refrained from providing specific details, stating that he did not want to prejudge the matter.
He has previously characterized the SEC’s review process as “thorough.” Recently, the SEC has been engaged in discussions with prospective applicants, focusing on technical aspects related to proposed redemption processes.
Among the companies involved, BlackRock stands out as it met with government regulators for the third time in as many weeks on December 12.
Last week, Grayscale, Franklin, and Fidelity also met with the SEC, indicating that efforts and interest in Bitcoin ETF applications are mounting.
BlackRock recently made revisions to its spot Bitcoin ETF application, aiming to cater to interest from major banks.
The updated application introduced new shares in the asset that can be purchased with cash, expanding the options beyond solely using cryptocurrencies.
The SEC is expected to make a decision on BlackRock’s application by January 15, with the final deadline set for March 15.
The SEC has generally denied or postponed spotcoin ETFs due to concerns over market manipulation and investor protection.
However, following a landmark court loss to Grayscale Investments in August, the agency began collaborating more closely with twelve firms to explore the possibility of bringing such assets to market. Cathie Wood of ARK Invest is one of many industry participants who believes that the SEC will approve multiple applications simultaneously to prevent a single company from being the first to market.
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