Having the U.S. Securities Exchange Commission (SEC) approve a cryptocurrency-based exchange traded fund (ETF) has become something of a holy grail for many crypto analysts over the last few years. Many believe that having SEC’s approval would finally give the crypto verse a seal of respectability and credibility from a regulatory agency that it’s lacked so far. It would also ease the way in for institutional investors.
Consequently, many applications have been sent to SEC so far and they’ve all been denied.
SEC’s resistance on the matter hasn’t dissuaded analysts and businesses of the value that an ETF would have for the cryptosphere as a whole and, more particularly, to the company that manages to pull the trick off first, which is why there are new projects and new applications to approve them.
The latest one was filed on May 9th, just a few days ago. So it’s now in possession of SEC. The new prospective ETF is sponsored by the United States Commodity Funds LLC (USCF).
The application’s creator is Crescent Crypto Index Services LLC, and it holds the ticket “XBET.” The company is a subsidiary of Crescent Crypto Asset Management LLC, and it’s a data collection firm that keeps the record of the market performance of Bitcoin and Ether according to market capitalization-weight.
The proposal
The application declares XBET to be an exchange-traded fund (ETF). That means that any investor interested in buying or selling shares in XBET will trade using their broker of choice. And that, in turn, means there will be commissions and charges, which is how brokers make their living.
XBET shares will trade on the NYSE Arca as “XBET.” In fact, they will be traded in the same way in which investors bid or ask for any standard publicly traded security.
USCF is a commodity pool operator. It’s under the Commodity Futures Trading Commission authority as well as the National Futures Association under the Commodity Exchange Act.
There’s competition, of course
So now XBET is on the list of ETF proposals under review by the SEC.
Two other Bitcoin ETFs are waiting for SEC to make a decision. One was filed by Bitwise Asset Management with NYSE Arca. The other one came from vanEck, SolidX and Cboe BZX Exchange. An announcement regarding those two was expected for last March, but it was postponed.
Which will be the first lucky project to become the U.S.’ first digital assets ETF? We don’t know, of course. So far, neither does the SEC. But sooner or later a project will come that will meet SEC’s regulatory requirements, and there’s no reason to believe that one of those three propositions currently under review couldn’t be it. At least non that we know.
It will be a game of patience for all those involved. SEC has been dragging its feet on crypto-related matters in such a way that, while many believed that it would hamper the cryptosphere’s development by trying to interfere too much, the opposite has been exact. It’s been keeping the cryptocurrency market from reaching its true potential by doing nothing and failing to make the appropriate (and often needed) regulatory decisions on time.
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