Mike Belshe, CEO of cryptocurrency exchange BitGo, is positive that a spot Bitcoin ETF approval from the United States Securities and Exchange Commission (SEC) is coming closer.
His position aligns with projections from Bloomberg ETF analysts Eric Balchunas and James Seyffart who said the odds of having the approval is at 90%. Mike Novogratz, Galaxy Digital founder, is also very optimistic that the U.S. SEC will approve the 12 spot Bitcoin ETF applications.
However, Belshe believes that it would come with some challenges. Furthermore, he emphasized that the present market structure needs to be improved before the U.S. regulator finally greenlights the much-anticipated offering.
Another Spot Bitcoin ETF Rejection
Speaking at a recent interview with Bloomberg, Belshe acknowledged that he has had some discussions with the SEC and many of the applicants in the current race for a spot Bitcoin ETF. From these conversations, he could deduce that the approval is imminent but the shortcoming is likely to be the structure of the market.
“I think it is quite likely we have another round of ETF rejections before we get the positive news,” he implied.
Market Structure Needs to be Addressed
One of the dysfunctionalities of the current market structure according to the BitGo CEO is the SEC’s view of the demarcation of crypto exchanges from custodians. For context, a crypto exchange is involved with buy and sell orders of digital assets between investors. On the other hand, crypto custodians only store cryptocurrencies on behalf of a customer.
The SEC is pushing the narrative that no company should be allowed to carry out both operations to avoid the commingling of customers’ funds as seen in defunct FTX.
SBF’s Multifaceted Operation Blows Up
According to Belshe, Sam Bankman-Fried, the former CEO of bankrupt crypto exchange FTX was trying to run a multifaceted operation.
He basically said, “Let me take on all these functions, it is going to be great, it is going to be efficient.” In the long run, it all blew up in his face and Bankman-Fried was accused of redirecting customers’ deposits to another trading firm Alameda Research he founded.
Considering this event, Belshe suggests that this crypto exchange-crypto custodian condition has to be tackled before the spot Bitcoin ETF approval comes.