Despite the anticipation among crypto enthusiasts for the spot Bitcoin ETF approval from the SEC, Peter Dunworth, from The Bitcoin Adviser, has expressed doubts regarding the expected approval of multiple ETFs by January 10th. Recently, he shared his insights on the imminent approval of Bitcoin exchange-traded funds (ETFs) during a candid conversation with Dale Warburton.
He began by questioning the widespread belief that Bitcoin ETFs are certain to be approved on the predetermined deadline. Dunworth argued that regulatory bodies, notably the Securities and Exchange Commission (SEC), might not strictly adhere to set timelines. He emphasized the independent nature of these institutions, suggesting they operate according to their schedules.
Dunworth highlighted a potential obstacle to approval, focusing on the custody breakdown for the ETFs. He pointed out that Coinbase holds 90% of the custodianship for the 20 ETFs under consideration. He expressed concerns about Coinbase’s ongoing SEC investigation for unregistered securities, indicating this could cause regulatory hesitation.
Predicting potential chaos in the Bitcoin market, Dunworth envisioned a scenario where the simultaneous approval of all 20 ETFs could lead to a massive influx of capital—potentially $10 to $20 billion—within a short period. He warned that such an influx might strain the market and trigger extreme price volatility.
Furthermore, Dunworth mentioned the likelihood of staggered ETF approvals, suggesting regulators might show favoritism towards certain institutions over others. He dismissed the idea that approvals would strictly follow the chronological order of applications, raising the possibility of regulatory bias.
Contrary to expectations of a smooth approval process, Dunworth highlighted uncertainties linked to ongoing investigations, the SEC’s approach, and the potential impact of sudden capital inflow on the market. He underscored unresolved issues surrounding key players like Coinbase and Grayscale, indicating these factors might contribute to a delay in the anticipated ETF approval.
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