Politics are behind spot Bitcoin ETF delays, BTC price to re-test record highs in the next 18 months - Mike Belshe
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(Kitco News) Political pressure is delaying the approval of a Bitcoin spot ETF, according to Mike Belshe, CEO of BitGo. Despite this challenge, he remains optimistic that Bitcoin's price will re-test its record high of $69,000 in the next 18 months.
Major financial institutions, including BlackRock, Fidelity, and VanEck, are competing to list the first spot-traded Bitcoin ETF in the U.S. Although the SEC approved a Bitcoin-linked Futures ETF in October 2021, the current push is for spot Bitcoin ETFs, which directly hold Bitcoin as the underlying asset, giving investors exposure to the actual price of Bitcoin.
Investors received a boost in confidence that such funds might soon get approval after the world's largest asset manager, BlackRock filed an application on June 15. Blackrock has a near-perfect record of ETF application approvals leading many to believe that it’s a matter of when not if, the SEC will give it the green light. According to Bloomberg Intelligence, the world’s largest asset manager has filed for around 550 ETFs and has been rejected only for one fund.
On top of that, Grayscale got a legal win against the U.S. Securities and Exchange Commission (SEC) following the D.C. Circuit Court of Appeals' ruling that some of the regulator's arguments in rejecting bitcoin ETF applications seemed "arbitrary and capricious."
Previously, many had faced rejection or had to withdraw their applications due to the SEC's concerns about spot-derived ETFs. The SEC has on multiple occasions, postponed its decision on spot bitcoin ETF applications, including those from BlackRock, WisdomTree, Invesco Galaxy, Wise Origin, VanEck, Bitwise, and Valkyrie Digital Assets, extending the comment periods for these applications to gather more public feedback. The SEC can take up to 240 days to finalize its decision on such applications.
Belshe told Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News, that it is not regulation but political pressure holding back approvals for spot Bitcoin ETFs.
"Regulators should be just applying the rulebook — 'here's what the legislation says, and here's the answer.' This should not be ambiguous," Belshe said on the sidelines of the Mainnet conference in NYC. "Why do you think the SEC and Gary Gensler seem so reluctant to approve a spot Bitcoin ETF and are making things ambiguous and capricious? It's political. It's not actually a matter of law."
For Belshe's thoughts on why there is a push to delay the regulatory clarity over the crypto sector and which industry has "undue influence" on regulation, watch the video above.
The political pressure makes it difficult to predict whether an ETF will be approved next quarter, Belshe added. "There's a lot of people that are wondering who's calling the shots, and it's probably a set of people," he said. "Over time, I definitely think we'll get one approved."
Many are pointing their finger at forces inside Washington, including U.S. Senator Elizabeth Warren.
"Right after Biden was elected, Senator Elizabeth Warren showed up and very publicly said, 'We're going to unwind all that crypto stuff.' And she encouraged Biden to do that," Belshe said. "She's very much in the center of a lot of what's going on with the SEC and also with the Biden administration."
The U.S. needs to have rules that are predictable and understandable to everyone to remain a leader in the global economy.
"There's a threat to democracy, which is regulatory capture, which is where industry can get undue influence into the regulatory and legislative law-making process. We all know this happens," Belshe noted, pointing to the banking industry. "Why have we not had significant, technical evolution of our banking system for the last 30 years, when we've seen a massive technical explosion in every other industry from the Internet to supply chain management to automobiles?"
BTC price forecast
Belshe also shared his price outlook for Bitcoin as the world's largest cryptocurrency has been stuck between $25,000 and $30,000 for months.
Following the Federal Reserve meeting this week, the central bank adopted a hawkish hold, keeping the Fed funds range at 5.25-5.5%, and Bitcoin held broadly steady.
In the next 18 months, Belshe sees Bitcoin re-testing the previous all-time highs of $69,000. However, despite the optimistic forecast, he hopes that it doesn't happen. Watch the video for why.
Belshe sees a lot of good coming out of this bear crypto market, watch the video above for details.