Timothy Massad, Columnist

A Bitcoin ETF Would Be Good for Investors and Regulators

The SEC could mandate standards on transparency, fraud prevention and conflicts of interest in cryptocurrency exchanges.

July 7, 2021 at 10:00 AM UTC

By Timothy Massad

Timothy Massad is a research fellow at the John F. Kennedy School of Government at Harvard University. He served as chairman of the Commodity Futures Trading Commission from 2014 to 2017 and was the U.S. Treasury Department's assistant secretary for Financial Stability and oversaw the Troubled Asset Relief Program.

Cryptic.
Photographer: Edward Smith/Getty Images

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The Securities and Exchange Commission faces an important decision about cryptocurrency: Whether to approve a Bitcoin exchange-traded fund. Although it would be best to see such ETFs approved only after Congress has strengthened crypto regulation generally, the likelihood of that happening in the near future is low. The next best thing, then, is for the SEC to approve an ETF conditionally in a way that would enhance transparency and integrity in the industry.

A Bitcoin ETF would be a way for retail investors to invest in cryptocurrency without having to actually purchase it and deal with the complexities of custody. There have been several applications to create Bitcoin ETFs pending with the SEC for years. To determine the price of shares of the ETF, they would rely on indices of Bitcoin prices derived from trading on crypto exchanges.