In a recent report, it has been suggested that the US Securities and Exchange Commission (SEC) is preparing to inform asset managers about the approval of their Bitcoin ETF applications as early as next week. This news has generated anticipation among investors and cryptocurrency enthusiasts, as the approval of Bitcoin ETFs could have significant implications for the market. In this article, we will explore the potential impact of Bitcoin ETF approval and analyze the current market situation.
According to Reuters, the SEC is expected to notify the 14 Bitcoin ETF applicants about the approval or rejection of their applications by Tuesday or Wednesday next week. This announcement would come ahead of the January 10 deadline for the agency to make a decision on the ETF application by Ark Invest and 21Shares. Asset managers that met their end-of-the-year filing revision deadlines may have the opportunity to launch their Bitcoin ETFs by January 10, 2024.
Updated Filings and Competition
Several asset management firms, including BlackRock, Van Eck, Bitwise, WisdomTree, Invesco, Valkyrie, and Fidelity, have recently updated their Bitcoin ETF filings with the SEC. Fidelity Investments, in particular, provided additional information and technical details in its S-1 form update. The firm aims to differentiate itself from other applicants by proposing the lowest sponsor fee at 0.39%. Invesco announced a 0.59% rate and a fee waiver on the first $5 billion in assets within the first six months after the launch. BlackRock, as a frontrunner in the Bitcoin ETF race, revealed Jane Street Capital and JP Morgan Securities as its authorized participants in its updated application.
Optimism and Speculations
The latest developments suggest that the SEC is looking to finalize the Bitcoin ETF approval process early in the new year. Reuters’ report has added optimism to the possibility of the agency approving multiple ETF applications by January 10. There have been speculations about the potential effects of the ETF approval on the Bitcoin market. Options platform Greeks.live has provided insights into the potential impact on the value of the premier cryptocurrency. However, despite expectations of positive news, there was little volatility across the major implied volatilities and the price of Bitcoin.
Using options data, Greeks.live suggests that the market has already priced in the potential approval of the Bitcoin ETF, implying that any positive development may not lead to significant price movements. The platform’s analysis is based on the observed low volatility across major term implied volatilities and the price of Bitcoin. Implied volatility represents the market’s expectation of future price movements. Interestingly, options implied volatility on January 12, which is believed to be strongly correlated to the Bitcoin ETF, has decreased rather than increased. This indicates that the approval may not have a substantial impact on the Bitcoin price.
Current Market Situation
As of now, Bitcoin is valued at $42,154, reflecting a marginal 0.4% increase in the past day. It is worth noting that the price of Bitcoin has already surged over 150% this year, partly due to the anticipation of a Bitcoin spot ETF. However, the current sideways movement of Bitcoin suggests a lack of significant market volatility in response to the ETF news.
The potential approval of Bitcoin ETFs by the SEC has generated excitement and speculation in the market. While the news may have implications for the cryptocurrency industry, it remains to be seen how significant the impact will be. The market’s response thus far indicates that the approval may already be priced in, leading to limited price movements. As the SEC makes its announcement next week, investors and enthusiasts will be closely watching the market for any signs of change. It is important for individuals to conduct their own research and make informed investment decisions based on their risk tolerance and financial goals.