Bitcoin CEO predicts more complex situations before the listing of Bitcoin ETF

Bitcoin CEO Forecasts More Complicated Scenarios Prior to Bitcoin ETF Listing

Author: Assad Jafri, Cryptoslate; Translation: Zheye, LianGuai

In a recent interview with Bloomberg TV, BitGo CEO Mike Belshe expressed a cautious attitude towards the approval of a Bitcoin ETF.

Belshe believes that there are realistic concerns associated with potential approval of a Bitcoin ETF, indicating that there may be more obstacles on the road to approval.

He states that although he is optimistic and positive progress has been made in discussions between ETF applicants and the U.S. Securities and Exchange Commission (SEC), there is still a high possibility of further rejection.

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Market Structure Issues

Belshe’s main concern revolves around market structure issues, particularly the SEC’s insistence on separating the roles of trading and custody. This issue has been controversial in various applications, especially those involving Coinbase custody.

Belshe points out that the SEC’s focus on market structure is not unprecedented, citing existing exchanges and regulatory separation in market structures like the CFTC and stock markets. He also suggests that remaining consistent with this separation model would benefit the crypto market.

According to Belshe:

“Gary Gensler is very clear about this, you have to separate trading and custody.”

The potential rejection of ETF applications may depend on the SEC’s concerns about inadequate separation between exchanges and regulatory functions. Belshe specifically mentions the custody partners chosen by most ETF applicants.

Belshe believes that the SEC will require a complete separation of these functions before approving the applications.

Market Optimism

Analysts estimate a 90% chance of ETF approval by January 2024, but Belshe’s comments suggest that the likelihood of rejection is still significant.

In the past, the SEC has rejected ETF applications, raising concerns about potential market manipulation and inadequate customer protection. However, applicants argue that these concerns are unfounded based on the SEC’s approval of Bitcoin futures ETFs.

The CEO of BitGo also compared Coinbase’s approach to the failed strategy of its bankrupt competitor FTX. Belshe quoted Sam Bankman-Fried’s centralized regulatory framework advocacy in Washington, D.C., which came under question after FTX collapsed.

The expectation of a Bitcoin spot ETF is driving the recent surge in Bitcoin prices, and the crypto community is closely watching the SEC’s decision.

Since the beginning of the year, Bitcoin has risen by about 45%. With BlackRock’s ETF application, it reached a high point of $38,000 earlier this week and is currently trading at $36,450.

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