Dennis M. Kelleher, the CEO of Better Markets, has voiced strong opposition to the United States Securities and Exchange Commission (SEC) approving a spot Bitcoin exchange-traded fund (ETF). In a recent communication with the SEC, Kelleher outlined his concerns, suggesting that such a move would contradict the regulatory body’s foundational principles.
Kelleher is the President and CEO of Better Markets, a nonprofit organization based in Washington, D.C. Better Markets focuses on promoting the public interest in the financial markets, advocating for a more stable, fair, and transparent financial system. The organization is known for its work in financial reform, particularly in response to the 2008 financial crisis. Kelleher has a background in law, policy, and advocacy. Before joining Better Markets, he had a diverse career spanning several sectors. He has worked in senior leadership roles on Capitol Hill, as a corporate lawyer, and as a litigation attorney.
In a letter to SEC secretary Vanessa Countryman dated January 5, Kelleher expressed his apprehension about the potential investor risks associated with a spot Bitcoin ETF. He claimed that he rarely submits supplemental comment letters, but he felt compelled to do so in this case, describing the approval of such a product as a “grave, if not historic mistake” that could lead to “massive investor harm.”
Kelleher’s primary concern revolves around the risk of fraud, a longstanding issue associated with the cryptocurrency industry. He stated, “The approval of these spot Bitcoin ETPs would not only expose investors to a market thoroughly contaminated with fraud and manipulation.” This statement comes in the context of a recent report by Cointelegraph, which revealed that over 324,000 crypto users fell victim to phishing scams in 2023, resulting in approximately $295 million in digital assets lost to wallet drainers.
Additionally, Kelleher pointed out that approving a Bitcoin ETF could be misconstrued as the U.S. government endorsing crypto products, potentially misleading investors about the safety and legitimacy of these investments.
Despite Kelleher’s warnings, prominent figures in the crypto industry have dismissed his concerns. Bloomberg ETF analyst James Seyffart criticized Kelleher’s letter on social media platform X (formerly Twitter), highlighting the extensive efforts by asset management firms to refine their spot Bitcoin ETF applications.
The well-known anonymous crypto analyst DonAlt recently warned about the potential effects of the SEC’s decision on a spot Bitcoin ETF. Addressing over 56,000 followers on the YouTube series TechnicalRoundup, DonAlt discussed the possibility of a significant drop in Bitcoin’s value depending on the SEC’s action.
DonAlt indicated that if the SEC decides against the ARK 21Shares Bitcoin ETF, which faces a January 10 deadline, Bitcoin’s value might decrease drastically about 37% from its present level. He pointed out that such a rejection could destabilize the market structure, which currently hovers between $33,000 and $38,000. The analyst traced the recent upward trend in Bitcoin’s price to around $24,000, largely crediting the rise from $27,000-$28,000 to the anticipation surrounding the ETF. In DonAlt’s view, a rejection from the SEC could result in Bitcoin’s price falling back to these earlier levels, possibly dropping to as low as $27,000 or $28,000.
As of the report, Bitcoin was trading at approximately $43,777, showing a slight increase of 0.33% in the last 24 hours. DonAlt believes this pricing is at a crucial point, with the upcoming ETF decision likely to play a significant role in determining the future direction of Bitcoin’s price.
DonAlt also brought up an interesting point regarding the potential approval of the ETF. Contrary to the general expectation that such approval would boost Bitcoin’s price, he suggests that the market may have already factored in much of this positive sentiment. He predicts that approval might lead to an initial surge in price, which could then trigger a sell-off, potentially causing Bitcoin’s value to drop towards the $38,000 mark before it recovers back above $40,000.
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