CEO of Better Markets Criticizes SEC's Potential Approval of Bitcoin ETF

Kelleher Expresses Concerns Over Investor Safety

Dennis M. Kelleher, Chief Executive Officer of Better Markets, recently articulated strong reservations regarding the United States Securities and Exchange Commission's (SEC) possible sanctioning of a spot Bitcoin exchange-traded fund (ETF). In a communication to the SEC, Kelleher underscored his apprehensions, arguing that this action might undermine the regulatory agency's core principles.

Better Markets: Advocating Financial Market Integrity

Better Markets, a Washington, D.C.-based nonprofit where Kelleher serves as President and CEO, dedicates itself to upholding public interest in financial markets. The organization, noted for its advocacy of a stable, fair, and transparent financial system, became prominent following its significant contributions to financial reforms post the 2008 financial crisis. Kelleher, with a varied background encompassing law, policy, and advocacy, has held pivotal roles on Capitol Hill, in corporate law, and as a litigation attorney.

Kelleher's Letter Highlights Risks of Bitcoin ETF

In a January 5 letter to SEC secretary Vanessa Countryman, Kelleher voiced his unease concerning the investor risks tied to a spot Bitcoin ETF. Describing the approval of such a product as potentially catastrophic, he emphasized the likelihood of "massive investor harm."

Concerns Over Cryptocurrency Fraud

Kelleher's primary worry centers on the risk of fraud in the cryptocurrency industry. He said, "The approval of these spot Bitcoin ETPs would not only expose investors to a market thoroughly contaminated with fraud and manipulation." This statement aligns with a recent Cointelegraph report showing over 324,000 crypto users fell prey to phishing scams in 2023, losing around $295 million to wallet drainers.

Potential Misinterpretation of Government Endorsement

He further indicated that sanctioning a Bitcoin ETF might inadvertently signal a U.S. government endorsement of crypto products, potentially deceiving investors about their safety and legitimacy.

Crypto Industry Figures Respond to Kelleher's Claims

While Kelleher remains skeptical, figures within the crypto sector have challenged his views. Bloomberg's ETF analyst James Seyffart, for example, critiqued Kelleher’s letter on social media platform X, highlighting efforts by asset management companies to enhance their Bitcoin ETF proposals.

Crypto Analyst Predicts ETF Decision Impact

Anonymous crypto analyst DonAlt shared insights about the SEC's pending decision on the ARK 21Shares Bitcoin ETF, due by January 10. He forecasted a potential 37% drop in Bitcoin’s value if the SEC rejects the ETF. According to him, Bitcoin’s current market structure, ranging between $33,000 and $38,000, could be destabilized, potentially falling to the $27,000-$28,000 range.

Bitcoin's Price at a Crossroads

At the time of reporting, Bitcoin was trading around $43,777, marking a slight 0.33% increase over the last 24 hours. DonAlt suggested that the forthcoming ETF decision is critical in determining Bitcoin's future price trajectory.

ETF Approval Could Trigger Market Fluctuations

Interestingly, DonAlt hypothesized that an approval might initially boost Bitcoin's price, potentially followed by a sell-off, driving the value down to about $38,000 before a recovery.