Expect Further Bitcoin ETF Rejections, Warns BitGo's Belshe

Mike Belshe, the CEO of BitGo, has indicated the possibility of the U.S. Securities and Exchange Commission (SEC) turning down a series of exchange-traded fund (ETF) applications related to spot Bitcoin (BTC). This sentiment arises despite a prevailing sense of optimism within the industry. In an interview conducted by Bloomberg, Belshe underscored that the SEC might decline current applications owing to the absence of clear segregation between exchanges and custody functions. It's noteworthy that Coinbase (COIN) has been selected as a custody partner by several applicants seeking approval for a potential ETF, Bloomberg reports

Belshe drew attention to concerns regarding undisclosed risks linked to Coinbase, stating, 

"There are a lot of risks in that entity Coinbase that are not understood."

 He suggested that the SEC might require a thorough separation of these components before entertaining the applications for approval.

Despite optimistic projections from various ETF analysts, estimating a high likelihood of approval in January, around 90%, Belshe's comments present a more cautious stance. The SEC has consistently rejected numerous ETF applications over the years, citing worries about potential market manipulation and insufficient customer protection.

Okay, we're nearing in on deadline dates for 3 spot #Bitcoin ETF applications. I want to get ahead of it because there's a pretty good chance we'll see delay orders from the SEC. Delays WOULD NOT change anything about our views & 90% odds for 19b-4 approval by Jan 10, 2024 pic.twitter.com/LE7sOlHAHM

— James Seyffart (@JSeyff) November 14, 2023

In a noteworthy development, BlackRock, a prominent fund manager, submitted an application for a spot Bitcoin ETF in June. Following this move, the price of BTC underwent a substantial surge, climbing by 45% to reach $36,200, according to data from TradingView. The landscape of Bitcoin ETF applications is continually evolving, marked by regulatory scrutiny and dynamic market forces, thereby influencing the industry's perception of their eventual approval.

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