Spot Bitcoin ETF Applicants Could Receive Approval from U.S. Regulator

Spot Bitcoin ETF Applicants Could Receive Approval from U.S. Regulator

The United States’ main securities regulator, the U.S. Securities and Exchange Commission (SEC), is expected to inform spot Bitcoin ETF applicants of their approval in the next few days, according to Reuters. This notification could be given on either Tuesday, January 2nd or Wednesday, January 3rd, allowing the applicants time to prepare for the launch of their exchange-traded funds on January 10th.

At least a dozen asset managers are planning to offer a spot Bitcoin ETF on various exchanges, including Nasdaq, Cboe BZX, and NYSE Arca. While Reuters did not specify which applicants are likely to receive approval, it noted that several firms, including BlackRock, VanEck, Valkyrie, Bitwise, Invesco, Fidelity, and WisdomTree, submitted amendments on December 29th, in line with the deadline for changes. Ark Invest and Grayscale are among the other firms that recently submitted amendments.

Engagement with the SEC

The recent batch of amendments by asset managers is just one example of the ongoing engagement between the SEC and the applicants. On December 21st, several applicants participated in a rare joint conference call with the SEC, and they have also had individual discussions with the regulator. Each firm has submitted multiple previous amendments to address concerns raised by the SEC.

One of the key concerns raised by the SEC relates to cash creations and redemptions. Initially, many applicants aimed to allow in-kind creations and redemptions, which would permit some ETF participants to transact in Bitcoin. However, recent amendments suggest that this feature is unlikely to be approved initially, as the emphasis has shifted towards cash models.

Importance of Bitcoin Holding

Regardless of the specific approval terms, any spot Bitcoin ETF will require the fund or its partners to hold Bitcoin (BTC), thereby driving demand for the cryptocurrency. This highlights the potential impact that the launch of these ETFs could have on the price and adoption of Bitcoin in the market.

Previous concerns raised by the SEC, such as surveillance-sharing agreements and the prevention of market manipulation, have been largely resolved. These issues were of paramount importance to the regulator, as they wanted to ensure that investors are protected and the market remains fair and transparent.

As spot Bitcoin ETF applicants eagerly await the SEC’s decision on their applications, the potential approval could herald a new era for the cryptocurrency market. With multiple asset managers ready to offer these ETFs on major exchanges, the increased accessibility and legitimacy of Bitcoin could attract more investors and drive its adoption in the mainstream financial industry.

Regulation

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