- VanEck and Coinbase executives criticize the SEC for rejecting spot Bitcoin ETF applications.
- This is leading to increased borrowing costs for Bitcoin ETF providers.
The Securities and Exchange Commission’s (SEC) persistent refusal to approve a spot Bitcoin exchange-traded fund (ETF) has come under fire from industry leaders. VanEck and Coinbase executives have pinned the blame on the SEC for a significant surge in capital costs associated with Bitcoin ETFs.
The SEC’s disapproval of in-kind creation and redemption of spot Bitcoin ETFs has forced market participants to engage in complex and expensive borrowing practices. These practices are necessary to meet the daily creation and redemption needs of Bitcoin ETFs.
“The inability to directly hold Bitcoin in an ETF structure creates unnecessary friction in the marketplace,”
said Ed Viesturs, head of digital assets at VanEck.
“This friction translates into higher costs for investors, which could be avoided if the SEC were to approve a physically settled Bitcoin ETF.”
Coinbase echoed similar sentiments, highlighting the strain that the current situation places on balance sheets. “The lack of a spot Bitcoin ETF forces us to be incredibly creative in how we structure our products,” said a Coinbase spokesperson. “These creative structures come at a cost, and ultimately, it’s the investors who foot the bill.”
Industry leaders are urging the SEC to reconsider its stance on spot Bitcoin ETFs. They argue that such products would provide investors with a more efficient and cost-effective way to gain exposure to Bitcoin.
“A spot Bitcoin ETF would be a game-changer for the industry,”
said Mike Novogratz, CEO of Galaxy Digital.
“It would bring much-needed legitimacy and transparency to the Bitcoin market.”
The SEC has yet to provide a clear timeline for when it might revisit its decision on spot Bitcoin ETFs. However, the growing pressure from industry leaders may prompt the commission to take a closer look at the issue.
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