Why Won’t the SEC Approve a Bitcoin ETF? With Perianne Boring

 
 

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“I think these policy fights for Bitcoin, this is the fight of my generation; and I think it’s absolutely important that we as Bitcoiners, and people who care about this technology, understand these political fights, these legal fights because if we get the policy wrong, it can totally skew our future.”
— Perianne Boring

SHOW DESCRIPTION

Perianne Boring is the Founder and CEO of the Chamber of Digital Commerce. In this interview, we discuss the history of Bitcoin spot ETF proposals, the numerous rejections and changing conditions for approval, and why the SEC won’t approve a Bitcoin spot ETF.

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The first application for a Bitcoin spot ETF in the US was made by the Winklevoss brothers back in 2013. The SEC rejected this proposal in 2017. Since then the SEC has rejected applications from at least 16 different companies, some of whom have made multiple applications. The last rejection was in early October.

It’s not that the SEC dislikes ETFs. There are over 2,500 ETFs in the US market with over $7.2 trillion AUM. Further, there is also strong demand in the market: over 99% of the 11,400 letters sent to the SEC in relation to Grayscale’s ETC application were in support. In the meantime, Bitcoin spot ETFs are being approved across the world, most notably across the border in Canada.

The Chamber of Digital Commerce, the blockchain trade association, has assessed the history of Bitcoin spot ETF applications accounted for in a report. This outlines major inconsistencies in the way the SEC treats applications: denials have conditions applied for subsequent applications; these conditions are met, the new applications are denied; rinse and repeat.

In addition, in 2021 the SEC approved the first US Bitcoin futures ETF. Whilst the performance of the Bitcoin futures ETF has tracked the Bitcoin price reasonably closely, futures markets are by their very nature volatile as futures contracts can be unpredictable. So, it is potentially a less safe vehicle for investment.

The obvious question is, therefore: why won’t the SEC approve a Bitcoin spot ETF? Perianne Boring, the CEO of the Chamber of Digital Commerce, is of the opinion the decision is political in nature. There is a wave of money waiting to invest in such an ETF, which would accelerate the adoption of Bitcoin. This is something many decision-makers are resistant to. What’s clear is that with Grayscale suing the SEC the issue is coming to a head.

TIMESTAMPS

00:02:01: Introductions
00:03:29: Peter Schiff and gold vs Bitcoin
00:08:11: Bitcoin in Congress, and the threat of Bitcoin
00:12:39: Teaching Austrian Economics vs Keynesian Economics
00:22:22: Interning in the White House
00:28:15: US vs UK healthcare
00:36:08: The role of the government, and crony capitalism vs libertarianism
00:46:26: Manipulation of inflation
00:55:05: Chamber of Digital Commerce
01:00:34: The Crypto Conundrum: SEC vs Bitcoin ETF
01:10:06: Gary Gensler, regulation, and registration for exchanges
01:15:57: Grayscale's rejected ETF
01:26:47: Spot ETF potential risks and downsides
01:40:14: Final comments

 

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SHOW NOTES

Connect with Perianne:

Mentioned in the interview:

Other Relevant WBD Podcasts:

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