U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce expressed her enthusiasm regarding the availability of spot bitcoin exchange-traded products (ETPs) for investors and market participants, following the SEC's approval for the listing and trading of multiple bitcoin ETPs.
Peirce stated, "I am not celebrating bitcoin or bitcoin-related products; what one regulator thinks about bitcoin is irrelevant. I am celebrating the right of American investors to express their thoughts on bitcoin by buying and selling spot bitcoin ETPs. And I am celebrating the perseverance of market participants in trying to bring to market a product they think investors want. I commend applicants’ decade-long persistence in the face of the Commission’s obstruction."
According to Peirce, the 3-2 vote approving ETPs signifies an end to an "unnecessary, but consequential, saga" that has spanned over a decade. She indicated that without a court ruling that the Commission's denial of Grayscale's application was "arbitrary and capricious," the SEC might not have approved a bitcoin ETP.
In her statement, Peirce described ETPs as an "important innovation" providing investors with a convenient means to gain exposure to products such as precious metals. Although direct exposure to these products might be available through other channels, she emphasized that ETPs are traded like regular stocks, which helps keep share prices aligned with asset prices.
During her six-year tenure at the SEC, Peirce was frequently asked about the timeline for approving bitcoin ETPs. She noted that the Commission's review process for these was different from comparable ETPs. Furthermore, she pointed out that other regulators have permitted trading of bitcoin products for years; two agencies under the Commodity Futures Trading Commission's (CFTC) jurisdiction have allowed bitcoin futures trading since 2017.
Peirce criticized the SEC's refusal to approve spot bitcoin ETPs, which she claimed forced retail investors to gain bitcoin exposure through "less efficient" means. She cited futures-based bitcoin products as an example, which are more complex and potentially result in higher costs for investors. "If we had applied the standard we use for other commodity-based ETPs, we could have approved these products years ago, but we refused to do so until a court called our bluff," Peirce said.
Before being sworn in as a Commissioner in January 2018, Peirce conducted research on financial market regulation at the Mercatus Center at George Mason University. She previously served as Senior Counsel to the Senate Committee on Banking, Housing, and Urban Affairs.
