The United States Securities and Exchange Commission (SEC) is expected to make an announcement in the coming days regarding the approval of spot Bitcoin exchange-traded fund (ETF) applicants. According to sources, the SEC will notify applicants on either January 2nd or January 3rd of their clearance to launch their ETFs. This would provide them with enough time to prepare for the launch, which is scheduled for January 10th. While the SEC is required to make a decision on an application from Ark/21Shares, it may also consider other pending applications at the same time. Over a dozen asset managers, including BlackRock, VanEck, and Fidelity, are planning to offer spot Bitcoin ETFs on exchanges such as Nasdaq and NYSE Arca.
In preparation for approval, several firms, including BlackRock, VanEck, Valkyrie, Bitwise, Invesco, Fidelity, and WisdomTree, submitted amendments to their applications on December 29th. These amendments were in line with the deadline for changes set by the SEC. While it is unclear which firms are likely to receive approval, it is evident that there has been active engagement between the SEC and asset managers. Notably, there was a joint conference call between several applicants and the SEC on December 21st, where discussions on various matters were held. Additionally, individual discussions and previous amendments have taken place in recent months.
One of the key concerns of the SEC regarding spot Bitcoin ETFs is the method of cash creations and redemptions. Initially, many applicants intended to allow in-kind creations and redemptions, which would enable certain participants to transact in Bitcoin. However, recent amendments suggest that the SEC is leaning towards cash models instead. While this may be disappointing for some applicants, a Bitcoin ETF would still require the fund or its partners to hold Bitcoin, thereby increasing the demand for the cryptocurrency.
Resolving Past Issues
There were additional concerns addressed during the discussions between the SEC and asset managers. One of these concerns related to surveillance-sharing agreements to prevent market manipulation. These issues have largely been resolved, indicating a positive progression towards the approval of spot Bitcoin ETFs.
The Future of the Crypto Market
The potential approval of spot Bitcoin ETFs by the SEC has significant implications for the crypto market. If approved, ETFs would provide institutional and retail investors with a regulated and accessible avenue to invest in Bitcoin. This could potentially lead to increased adoption and acceptance of cryptocurrencies in the mainstream financial industry. However, the decision of the SEC holds great weight. A rejection could potentially dampen the enthusiasm surrounding Bitcoin and slow down its progress towards wider institutional acceptance.
The SEC’s imminent decision regarding spot Bitcoin ETFs has sparked anticipation and excitement among market participants. The approval of these ETFs would mark a significant milestone for the crypto industry, opening the doors for greater investment opportunities. However, until the SEC officially announces its decision, the future remains uncertain. Market participants must wait anxiously to see if the SEC will give the green light to these innovative investment products.