The Securities and Exchange Commission is hearing from a diverse group of characters participating in the public comment process for eight applications for spot bitcoin ETFs currently under review, having received letters from a musician, a former cricket player, a city planner, a mechanic and a physicist.
The SEC acknowledged most of the filings last month, triggering a process where anyone can send along their thoughts about the proposed funds from asset managers including BlackRock, Fidelity, VanEck and Invesco. The regulator has an initial 45-day period to rule on the proposals, although it can delay that period as it did for an earlier request from Ark Invest and 21Shares.
While the excitement over the possibility of a spot fund triggered a rally in the price of bitcoin, which skyrocketed around 20% in the days after BlackRock’s filing, SEC Chair Gary Gensler has repeated concerns about fraud and manipulation in the sector when asked about all the applications last month.
The commission has so far received 52 letters about the proposed funds, with most of them expressing support. Some expressed skepticism about the process.
‘A powerful innovation’
Joseph B Dart, a self-employed musician, urged the SEC to immediately approve all the requests, noting a “mandate to protect and serve individual American investors.” Paul Knight, a city planner, called bitcoin a “powerful innovation that that promotes human rights and improves the human condition.”
John Rundle, who said he was a professor of physics at the University of California, said it was “high time” to approve the funds.
“As is well known, futures contract must converge on the spot price at expiry,” he wrote. “So if there is fraud in the spot price, there will be fraud in the futures contract price. It makes no sense of the SEC to have approved futures bitcoin ETF but to deny spot ETFs, based on the assumption there may be fraud in the underlying spot, but not in the futures price.”
‘Catastrophic existential threat’
Most of the comments against approval appeared in multiple letters from a “business consultant” calling themselves The Due Diligence.
“Bitcoin and all other cryptocurrencies are a catastrophic existential threat to the United States and the world economy as it currently exists. The US Dollar as the world reserve currency would suddenly disappear throwing everything into disastrous global chaos,” they wrote in one of the letters.
Grayscale has also come out against the newer fillings, arguing that so-called surveillance-sharing agreements with Coinbase would neither satisfy or be necessary under the current standard used by the regulator. The SEC has previously rejected a proposal from Grayscale to convert its flagship GBTC fund into a spot bitcoin ETF.
Others figured the whole exercise was fruitless either way.
“Of course, this comment period is completely pointless,” Naceur Hussein, a self-described former international cricket Player and commentator, said in a letter about Wise Origin Bitcoin Trust. “None of these comments will be considered, as the decision is just fully at the whim of how Gary Gensler feels about crypto.”
The comment period wraps up next week, with the SEC accepting letters for the final funds through Aug. 11.
