The highly-anticipated launch of a spot Bitcoin exchange-traded fund (ETF) in the United States could potentially take place right before Labor Day, according to Bloomberg Intelligence. The US Securities and Exchange Commission (SEC) is expected to respond to several applications from prominent asset managers, including BlackRock, Bitwise, WisdomTree, VanEck, and Invesco, in the coming days. This article critically examines the prospects of this long-awaited ETF launch.
The SEC’s Decision-Making
Historically, the SEC has shown reluctance towards approving ETF filings related to Bitcoin. It rejected Grayscale’s Bitcoin trust conversion into an ETF last year and has also delayed its decision on the joint effort of ARK Investment Management and 21Shares to launch a spot BTC ETF. With these precedents, it is reasonable to question whether the SEC’s stance will change with the current applications.
Roxanna Islam, the associate director of research and head of sector and industry research at VettaFi, expresses pessimism regarding the SEC’s approval. She suggests that the SEC may continue to delay its decision, citing the agency’s recent decision to delay ARK’s spot-Bitcoin ETF filing earlier this month. Islam argues that the SEC may prioritize making a decision on Grayscale’s lawsuit before approving any spot-Bitcoin ETF filings, and even posits the possibility of the SEC approving Ether-futures ETF filings first.
Despite the uncertainties surrounding the SEC’s decision, the involvement of BlackRock in the filings has generated optimism in the crypto space. BlackRock’s track record with the SEC, having only one ETF rejection out of 576, instills hope for a positive outcome. The trusted relationship between the US government, Federal Reserve, and BlackRock, demonstrated during the 2008 Financial Crisis when the asset manager was asked to develop a rescue plan, further bolsters the case for approval.
Additionally, BlackRock’s CEO, Larry Fink, has undergone a change of heart regarding Bitcoin. In 2017, Fink referred to Bitcoin as an “index of money laundering,” but more recently, he has aligned his stance with those who support the asset. This shift in perspective may influence the SEC’s decision-making process regarding BlackRock’s application.
It is also worth considering that BlackRock has prior experience in the field, having launched a Bitcoin private ETF for institutional investors. This experience could provide the necessary credibility and expertise in the eyes of the SEC.
Furthermore, the existence of spot BTC ETFs in other regions, such as Canada and Europe, serves as evidence of their viability. With several asset managers, including Vanguard and Fidelity, also submitting applications, it indicates a growing interest and demand for such investment products in the US market.
While the launch of a spot Bitcoin ETF in the US remains uncertain, the coming days will reveal the SEC’s decision regarding the applications from BlackRock, Bitwise, WisdomTree, VanEck, and Invesco. The regulatory landscape surrounding Bitcoin ETFs is evolving, and the involvement of prominent asset managers like BlackRock has injected optimism into the crypto space. Whether the SEC will approve, reject, or delay these filings is yet to be seen. However, with the changing attitudes towards cryptocurrencies and the growing interest from institutional investors, the possibility of a spot Bitcoin ETF becoming a reality in the world’s largest economy is becoming increasingly plausible.