Spot Bitcoin ETF Approval: SEC Signals Positive Decision Soon

02. Jan 2024 Posted by Guest on News

The primary regulator for securities in the United States may soon communicate approval to applicants seeking to launch spot Bitcoin ETFs, as reported by Reuters on December 29.

The U.S. Securities and Exchange Commission (SEC) is expected to notify potential ETF issuers on either January 2 or January 3, granting them clearance to introduce their exchange-traded funds. If this occurs, the applicants would have adequate time to prepare for a scheduled launch on January 10. While the SEC must make a decision regarding the application from Ark/21Shares at that time, it could also address other pending applications concurrently.

Around twelve asset management firms have expressed their intent to introduce spot Bitcoin ETFs on various platforms, including Nasdaq, Cboe BZX, and NYSE Arca.

The Reuters report did not specify which applicants are likely to receive approval. However, it highlighted that multiple companies, including BlackRock, VanEck, Valkyrie, Bitwise, Invesco, Fidelity, WisdomTree, Ark Invest, and Grayscale, submitted amendments by the December 29 deadline for changes. This batch of amendments is just one instance of ongoing interactions between the SEC and asset managers. Notably, applicants engaged in a joint conference call with the SEC on December 21 and participated in prior individual discussions. Each company has also submitted numerous amendments in the past.

Recent discussions between the SEC and applicants have focused on cash creations and redemptions. While initial plans aimed at allowing in-kind creations and redemptions, recent amendments suggest a shift towards cash models, with approval for the former appearing unlikely initially. Nevertheless, any approved spot Bitcoin ETF will necessitate the fund or its partners to hold Bitcoin (BTC), thereby boosting demand for the cryptocurrency.

Previous concerns, such as surveillance-sharing agreements and the prevention of market manipulation, have reportedly been largely resolved in earlier discussions.