The U.S. Securities and Exchange Commission (SEC) has announced that the discussion and decision on the Bitcoin ETF proposal submitted by VanEck will be delayed until June 2021.

What can a bitcoin ETF offer?

As of now, Grayscale, with its product Grayscale Bitcoin Trust, has a virtual monopoly on the Bitcoin fund, with respect to institutional funds that are indirectly invested in cryptocurrencies.

Grayscale Bitcoin Trust is usually used by institutions for various regulatory reasons rather than buying bitcoin directly, and GBTC is usually priced at a premium compared to the real bitcoin price.

The approval of the Bitcoin ETF will provide a more stable alternative to the “Grayscale Bitcoin Trust” and it is likely that large amounts of institutional wealth will flow into the new SEC-approved Bitcoin ETF.

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Since ETFs are traditional regulated funding offerings, they will be available on very popular trading platforms.

This is likely to be a massive increase in demand in the medium term and will enable a new world of retail traders to access the cryptocurrency markets, especially those who have trouble dealing with digital technology.

Besides the ability to obtain bitcoin through popular trading platforms, the bitcoin ETF is likely to be very popular with institutions given that the regulatory framework and tax strategy that the government uses with the ETF is more straightforward.

Meaning, institutions won’t have to worry about issues like custody and storage since the Bitcoin ETF provider will provide this service, and the ETF will only track the price and index of the cryptocurrency instead of being redeemable directly against real Bitcoin on the Bitcoin network.

Unfortunately, postponed The Securities and Exchange Commission (SEC) once again ‘VanEck’ proposal for the Bitcoin ETF..

History of the SEC with the Bitcoin ETF:

So far, the SEC has denied or delayed Bitcoin ETF applications.

None of them have been approved in the USA.

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Several years ago, one of the earliest Bitcoin ETF rejections drove the price of Bitcoin down more than 10% to below $900.

But now the cryptocurrency market has matured and become of much larger size and relative stability, as the subsequent rejection of the ETF did not cause declines in large volumes and percentages

Indeed, it appears that cryptocurrency investors have decided to ignore institutional ETF news, as it has proven irrelevant time and time again, as we saw with JP Morgan previously.

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Currently there are several Bitcoin ETF proposals filed with the SEC from companies such as Galaxy Digital and Goldman Sachs.

The review process is carried out by the Trading and Markets division of the Securities and Exchange Commission.

Analysts speculate that it will take one word from the top (i.e., from an SEC commissioner) to approve a Bitcoin ETF.

But now more delays can be expected.

It is worth noting that although every SEC decision has been rejected so far, we have seen a significant increase in the number of legacy financial institutions participating and filing for Bitcoin ETF credentials.

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