During the administration of former United States President Donald Trump, the Securities and Exchange Commission did not get around to approving any of the various applications for a Bitcoin exchange-traded fund. The commentary issued by the SEC adjudicators in every denial was hopeful, but the year 2020 closed with a Bitcoin rally and no signs of an ETF approval.
With the new administration and a fresh nominee expected to lead the SEC, some Bitcoin analysts and cryptocurrency fund managers are even more hopeful that 2021 will be the year when BTC goes mainstream with an ETF that can trade on Wall Street. Cathie Wood, CEO of Ark Investments, is guardedly hopeful in this regard; she thinks that the SEC will need to see a higher demand for Bitcoin and less volatility in the cryptocurrency trading markets. Based on Wood's estimates, the SEC would probably like to see about $3 trillion in overall demand before approving a Bitcoin ETF application.
Even though some market analysts thought that the more business-friendly Trump administration would have been more receptive to the idea of a Bitcoin ETF, the chairman nominee Gary Gensler inspires more confidence in this regard. Gensler is known to be an advocate of digital currencies, but this does not necessarily mean that he is a Bitcoin supporter. It is important to remember that most financial regulators are supportive of blockchain technology, but they have their doubts in relation to decentralized tokens.
The SEC does not appear to be in a rush to review new Bitcoin ETF filings; after all, there are more pressing issues at hand, but if the Treasury Department starts looking to develop a digital version of the U.S. dollar, there could be arguments in favor of allowing Wall Street investors to trade ETFs with digital currencies as underlying assets.
In Canada, financial regulators recently gave the green light to a project that is essentially a Bitcoin ETF traded on over-the-counter markets, thus making it the first of its kind in Noth America. A similar situation has previously unfolded in Switzerland. Based on these developments, it is safe to say that the reality of a Bitcoin ETF could be around the corner in 2021.