SEC’s Hester Peirce Says Cryptocurrency Market Has Matured

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In Brief
  • Hester Peirce, one of the SEC's three commissioners, has suggested the cryptocurrency market is maturing in an interview with Bitcoin.org.

  • Peirce attributes this maturation to the increasing interest in the market from large institutions.

  • Whilst not confirming whether the SEC would approve a Bitcoin-based ETF, Peirce suggested the SEC's relationship with the market might change.

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SEC Commissioner, Hester Peirce, said in an interview with Bitcoin.org that she believes the cryptocurrency market has matured owing to increased institutional interest.

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Institutions bring maturity

Hester Peirce, a commissioner for the United States Securities and Exchange Commission (SEC) said in an interview that Bitcoin, and the wider cryptocurrency market, are maturing.

Peirce attributes the trend to the increased interest in the market coming from large institutions in the mainstream financial industry. She goes on to point out that the market is also producing a number of “quasi exchange traded products”, a characteristic of a developing market.

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These include investment vehicles such as Grayscale Investments’ Bitcoin and Ethereum Trusts which are extremely popular with institutional investors.

BeInCrypto previously reported that Grayscale’s Assets Under Management (AUM) for its cryptocurrency products is approaching a record $50 billion. Its most popular investment vehicle, the Grayscale Bitcoin Trust (GBTC), has assets valuing over $38 billion alone.

Time for an ETF?

Pierce’s comments come as the SEC is considering several applications for the first cryptocurrency-backed exchange-traded fund (ETF) in the US market. These include applications from renowned fund manager, VanECK, the world’s largest investment manager, Fidelity, and even Grayscale itself.

However, the SEC has rejected every Bitcoin ETF application it has seen thus far. Asked whether this could change in the near future, Pierce suggested that both the market’s maturity and interest from serious investors could alleviate some concerns the Commission might have with regards to the underlying market.

She even pointed to developments in Canada – where several ETFs have recently been approved – as an indication of what might happen in the US.

Most notably however, Pierce recognized the uniqueness of the Bitcoin market, saying it is “never going to look like an equity market for example”. She goes on to admit that trying to apply the SEC’s current framework to the cryptocurrency market when assessing the viability of a Bitcoin ETF might be “inappropriate”.

SEC’s cryptocurrency relationship changes

Whilst there was no confirmation as to whether the latest applications would be successful, Pierce’s remarks might indicate an SEC willing to change its relationship with cryptocurrency.

In fact, in less than two weeks, legislators in the US will confirm a new SEC Chairman, likely to be one Gary Gensler. Gensler is a self-expressed supporter of blockchain technology, calling for the Commission to support innovation in the technology in the past.

He is also known to have remarked that he thinks Bitcoin is not a security. A debate which is currently at the center of a dispute between the regulator and Ripple Labs.

Indeed, one of the reasons Peirce presented for not being able to confirm the SEC’s stance on the latest ETF applications was that the change in leadership could also mean a change in the regulator’s approach.

If this is indeed, the cryptocurrency ETF market, which is already growing worldwide, might soon see the first US-based competitor.

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Emmanuel entered the cryptocurrency space in 2013 as a cryptocurrency broker. He is a crypto-enthusiast, entrepreneur, and investor, who has built and led several projects and communities in the space. He is CEO and co-founder of Provence Intelligence, a boutique crypto-consultancy firm that aims to bridge the gap between the cryptocurrency and DLT space and the traditional world. Interests include DeFi, non-blockchain DLTs, and the synthetic derivatives space.

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