[Bitcoin Now] Hesitation After New SEC Chair's Warning... ETF Introduction Expectations Remain

Gary Gensler SEC Chairman Nominee "Bitcoin Investment Raises Concerns of Fraud and Manipulation"
Previously Showed Pro-Cryptocurrency Stance... Bitcoin ETF Introduction Expectations Rise

Gary Gensler, Nominee for Chairman of the U.S. Securities and Exchange Commission (SEC)
Photo by EPA Yonhap News

[Asia Economy Reporter Gong Byung-sun] The upward momentum of the leading cryptocurrency Bitcoin has slowed down. This appears to be due to the nomination of Gary Gensler as chairman of the U.S. Securities and Exchange Commission (SEC), who emphasized the need for regulation. Nevertheless, since Gensler has historically expressed a pro-cryptocurrency stance, expectations are growing that a Bitcoin exchange-traded fund (ETF) will eventually be introduced on the U.S. stock market.

According to the domestic cryptocurrency exchange Upbit, as of 1:35 p.m. on the 3rd, Bitcoin recorded approximately a 0.5% increase from the previous day, reaching 56.28 million KRW. After rising from the 49 million KRW range on the 28th of last month to the 55 million KRW range, it has been moving sideways for three days.

The upward trend appears to have halted due to Gary Gensler’s mention of Bitcoin regulation. On the 2nd (local time), according to U.S. economic media Bloomberg, Gensler stated at the Senate confirmation hearing that “cryptocurrency investors are exposed to risks of fraud and manipulation,” highlighting the need for regulation.

Nonetheless, Gensler’s appointment is being interpreted as a positive signal for the cryptocurrency market. He is known as a Bitcoin advocate who has lectured on cryptocurrencies at the Massachusetts Institute of Technology (MIT). Therefore, attention is focused on whether the SEC, which had been negative toward cryptocurrencies, will change its stance and approve a Bitcoin ETF. Currently, the Chicago Board Options Exchange (CBOE) has again requested the SEC to approve VanEck’s Bitcoin ETF launch. Previously, the SEC had been negative enough to block Bitcoin ETF launches since 2018. In 2019, VanEck applied to launch a Bitcoin ETF but later withdrew the application. On January 27 (local time), U.S. economic media Forbes predicted that “if Gensler is appointed as SEC chairman, cryptocurrency ETFs including Bitcoin could be introduced.”

The financial sector’s favorable stance toward Bitcoin is also interpreted as having a positive impact. On the 28th of last month (local time), Citibank claimed that Bitcoin could be used as an international trade settlement method in the future. On the Toronto Stock Exchange (TSX) in Canada, Bitcoin ETFs began trading from the 18th of last month (local time). The CBOE explained the reason for listing the Bitcoin ETF by stating, “Unlike in the past, the cryptocurrency market has greatly developed due to the launch of Bitcoin futures products and support from the financial sector.”