Bitcoin ETF applications are gathering dust from the SEC’s Gensler over gaps.

Exchange-traded key managers are eager to make money with the frantic negotiation of cryptocurrencies for longer than expected from a regulatory review, after Gary Gensler, chairman of the Securities and Exchange Commission, frustrated hopes of quickly approving bitcoin ETFs this year.

In a testimony before the House of Representatives sub-committee on financial services last week, Gensler said “there are many challenges and gaps in investor protection. [crypto] markets ”. He added that “even the exchange of cryptocurrency tokens has not yet been registered as an exchange with the SEC.”

It wasn’t the first time the SEC president had highlighted his concerns lax supervision, and its stance tells industry insiders that the agency wants to try to regulate more cryptocurrencies under its regulatory authority before approving a list of some of the applications for Fidelity, WisdomTree, Wilshire Phoenix, VanEck and First Trust SkyBridge bitcoin ETF applications. The wait-and-see game is a small but growing number of ethereal ETFs, after VanEck and WisdomTree submitted SEC approval in May.

The SEC earlier rejected some bitcoin ETF requests and recently delayed a decision on another one: a resolution on VanEck’s filing will be issued in June, the agency said on April 28, just hours before the previous deadline.

“I hope so [delay] happening with all of our presentations, actually, ”said Laura Morrison, head of listings at Cboe, which many cryptocurrencies have chosen as an exchange to be listed.

Crypto fans were originally encouraged by Gensler’s appointment, as he taught classes on blockchain technology while out of government at the Massachusetts Institute of Technology, but recently called for “greater investor protection” for bitcoin. The distribution of investment management in the SEC issued a warning to investors about the risks of the crypto market.

Both actions cooled optimism in a somewhat unregulated $ 2 million asset class. While the Futures Commodity Trading Commission regulates the futures of cryptocurrencies, spot exchanges like Coinbase or Kraken have less oversight.

“[Gensler] he wants to see the regulation there, and if that happens, it looks like that would be what the SEC needs to support a bitcoin ETF, ”said Craig Salm, Grayscale’s vice president of law, who trades bitcoin trusts — counter markets.

An executive in a fund management team looking at cryptocurrencies said Gensler is likely looking at the bitcoin ETF approval process as a way to gain more oversight and regulation over cryptocurrencies.

Gensler’s prudence is shared on Capitol Hill, where senior lawmakers such as Democratic senators Sherrod Brown and Elizabeth Warren should say the SEC Be careful cryptocurrency before ETFs are approved.

However, some fund managers remain optimistic.

“We have a half-full glass“ about the state of cryptocurrency regulations, ”said Jan Van Eck, CEO of VanEck. “Opponents of a Bitcoin ETF are effectively forcing investors to lower fund structures and less regulated residences.”

The delay in the acceptance of cryptocurrency ETFs has not stopped the demand from investors through the various proxies of the bitcoin market. These include GreyScale Trust and shares in MicroStrategy, a software company with about $ 4.5 million in cryptocurrency, and Bitwise’s Crypto Industry Innovators ETF, which owns companies like Coinbase. This growth market of Bitcoin exposure is seen to expand if there is no formal approval for ETFs.

The fate of Bitcoin ETF applications lies in the SEC’s belief that they have the right protections for cryptocurrency investors prices are volatile and are considered vulnerable to fraud and manipulation.

“Given the recent comment by SEC staff and chairs, it is reasonable to think that asset managers want to convince the regulator that the proposed funds will cover risks for investors,” said Todd Rosenbluth, head of fund research and ETF research. CFRA.

“The regulatory approval process for a US bitcoin ETF is to find out whether they are comfortable with the risks associated with bitcoin in a fund and whether it can become too large a fund to manage market liquidity.”

Fund providers are working on cryptographic ETF applications to address regulatory concerns. Bitwise, which initially withdrew the application after it was denied, in 2019 asked to approve a bitcoin ETF by regulation, which it has been filing for more than a year.

“We’ve been working on a variety of ways to prove that the market is old enough to meet workers’ concerns, ”said Matt Hougan, his lead investor.

Regulators in other countries have approved bitcoin ETFs, releasing more than a billion dollars in global revenue. Canada’s Purpose Bitcoin ETF, which began trading in February, raised more than $ 1 billion in assets under management of less than two million. In Europe, several products traded on the exchange are listed in Germany and Switzerland.

It is not uncommon for US regulators to take a few years before new ETFs are approved. Still, the crypto crowd has been frustrated with the lengthy process.

“Crypto lives on in dog years,” Bitwise told Hougan. “A week in the crypto market is like a year in the capital markets.”