The US SEC May Approve Bitcoin ETF Applications Next Week

The US SEC May Approve Bitcoin ETF Applications Next Week

The US Securities and Exchange Commission (SEC) is expected to notify asset managers regarding the approval of their spot Bitcoin ETF applications as early as next week, according to a report from Reuters. This update comes ahead of the January 10 deadline for the SEC to make a decision on whether or not to green-light the ETF application by Ark Invest and 21Shares. If approved, several firms, including BlackRock, Van Eck, Bitwise, and Fidelity, could launch their Bitcoin ETFs. However, the impact on the Bitcoin price may not be significant, as the market has already priced in the potential approval.

Approval Notification

Reuters reported that the SEC is likely to inform the 14 Bitcoin ETF applicants about the status of their applications by Tuesday or Wednesday next week. Asset managers who met their end-of-the-year filing revision deadlines may be able to launch their ETFs by January 10, 2024. Some of the notable firms that have updated their Bitcoin ETF filings with the SEC include BlackRock, Van Eck, Bitwise, WisdomTree, Invesco, Valkyrie, and Fidelity. In its S-1 form update, Fidelity Investments revealed more information and technical details about its potential ETF product, proposing the lowest sponsor fee at 0.39%. Invesco announced a 0.59% rate with a fee waiver on the first $5 billion in assets within the first six months after launch. BlackRock, the world’s largest asset manager, disclosed Jane Street Capital and JP Morgan Securities as its authorized participants.

The possibility of the SEC approving several ETF applications by January 10 has led to speculation about the effects on the Bitcoin asset. However, options platform suggests that the market has already priced in the potential approval, and any positive developments may not result in significant price movement. Using options data, observed little volatility in the major term implied volatilities (IVs) and the price of Bitcoin. This lack of volatility, coupled with a decrease in the options implied volatility on January 12 (strongly correlated to the Bitcoin ETF), suggests that the approval may not have a substantial impact on the Bitcoin price.

As of now, Bitcoin is valued at $42,154, reflecting a minimal increase of 0.4% in the past day. Throughout the year, the price of Bitcoin has surged by over 150%, driven in part by the anticipation of a Bitcoin spot ETF. However, the price remains relatively stagnant in the face of updates and developments related to the ETF. This indicates that the market may not perceive the approval of a Bitcoin ETF as a game-changing event that could lead to significant price appreciation.

The SEC’s potential approval of Bitcoin ETF applications next week brings optimism to asset managers and investors. However, while the market has priced in the possibility of approval, it is uncertain whether the ETF will have a substantial impact on the Bitcoin price. The lack of volatility in options implied volatility and the minimal price movement of Bitcoin suggest that the approval may not result in significant price appreciation. Nonetheless, the launch of Bitcoin ETFs would provide investors with additional opportunities to gain exposure to the cryptocurrency market and could potentially contribute to its long-term growth. As with any investment, conducting thorough research and considering the associated risks are key to making informed investment decisions in the cryptocurrency space.


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