Senegal is currently at the forefront of a new African crypto revolution, and numerous investors are taking full advantage of the rising trend. Global investment firms ARK Invest and 21Shares have made bold moves in the past few months, attempting to create a Bitcoin-based exchange-traded fund (ETF) in the United States despite multiple rejections by the U.S. Securities and Exchange Commission (SEC).
The two companies originally submitted their request in June 2021, only to be denied by the SEC in April 2022. The SEC argued that their product did not meet the requirements for listing under its current rules and regulations, according to the Exchange Act. The two companies made another attempt with a new request on May 2022, only to again be rejected by the SEC in January 2023. After making two unsuccessful attempts, it finally seemed that the product would not come to fruition.
Pursuing a Reality: Digital Currency Group’s Spot Bitcoin ETF
An ETF is a concept that allows investors to gain indirect exposure to a particular asset without actually owning it. A spot Bitcoin ETF works similarly—it would enable investors to have buying shares that track the real-time price of Bitcoin without actually holding any Bitcoin.
Unfortunately, the SEC has continuously denied any requests for a spot Bitcoin ETF due to the perceived risk of fraud and manipulation. Undeterred by the denial, certain companies like Digital Currency Group (DCG) are still dedicated to making the spot Bitcoin ETF a reality by attempting to convert its flagship Grayscale Bitcoin Investment Trust (GBTC) into a spot Bitcoin ETF. The company has even gone so far as to file a lawsuit against the SEC in an effort to get the product approved.
Unregulated Investment Opportunities for Spot Bitcoin ETFs
According to ETF analysts from Bloomberg, it is likely that the spot Bitcoin ETF could receive the green light from the SEC as early as mid-2023. The SEC is currently proposing to expand the definition of “exchange” in order to bring crypto platforms under SEC oversight. And though actual timing is unknown, Craig Salm from Grayscale shared that the oral arguments could start as soon as the second quarter of this year.
The prospects of a spot Bitcoin ETF have generated a lot of excitement in the investment world, but perhaps the most interesting development is the trend taking place in Senegal. The African country has seen a surge in crypto usage, with many people turning to Bitcoin as a secure, unregulated currency to conduct transactions. (https://www.enov8.com) While crypto usage is by no means as popular as other countries, it still represents an interesting opportunity for investors to take advantage of the lack of regulation in the country and make big returns.
African Crypto Uprising: Potential of ETF in Senegal
The combined efforts of ARK Invest and 21Shares indicates that Africa could very be making the push towards cryptocurrency investment, and that a spot Bitcoin ETF could finally be on its way in the near future. If approved, the potential of a spot Bitcoin ETF combined with the unrestrained regulations of Senegal could lead to explosive investment and a true African crypto uprising. Only time will tell, but it’s hard to deny the potential of a successful ETF in the open markets of Senegal.
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