The United States Securities Regulator Nears Approval for Spot Bitcoin ETF

The United States Securities Regulator Nears Approval for Spot Bitcoin ETF

The United States Securities and Exchange Commission (SEC) is reportedly on the verge of informing spot Bitcoin ETF applicants of their approval within the coming days, with the potential announcement to be made on January 2 or January 3, according to a Reuters report on December 29. This news has caused ripples of excitement within the cryptocurrency community as the launch of these exchange-traded funds could have significant implications for the industry.

If the SEC proceeds with the anticipated announcement, applicants will have time to prepare for the launch of their ETFs on January 10. While the approval or rejection of Ark/21Shares’ application is set for that specific date, the SEC may also simultaneously decide on other pending applications. Notably, BlackRock, VanEck, Valkyrie, Bitwise, Invesco, Fidelity, and WisdomTree are among the asset managers who recently submitted amendments to their applications in line with the SEC’s deadline for changes.

The recent batch of amendments is indicative of the ongoing engagement between the SEC and various asset managers. In fact, these applicants participated in a rare joint conference call with the SEC on December 21, and earlier individual discussions were held as well. Throughout this process, each firm has submitted numerous previous amendments to address concerns raised by the regulator.

One notable change seen in the recent amendments is a shift away from in-kind creations and redemptions towards cash models. Initially, many applicants aimed to allow for in-kind transactions, which would enable ETF participants to transact in Bitcoin. However, it appears that this feature is unlikely to gain immediate approval. The focus on cash models instead suggests that participants will be transacting in traditional currencies, such as the US dollar, rather than Bitcoin.

Despite the change in approach, any approved spot Bitcoin ETF will still require the fund or its partners to hold Bitcoin. This will drive demand for the cryptocurrency and potentially lead to an increase in its value. Bitcoin’s market presence would be further solidified as institutional investors gain easier access to the digital asset through regulated ETFs.

The SEC’s previous concerns surrounding surveillance-sharing agreements and the prevention of market manipulation have largely been addressed. Through ongoing discussions and amendments, the regulatory body and asset managers have worked towards resolving these issues, paving the way for potential approval.

With approval potentially just days away, the launch of spot Bitcoin ETFs in the United States could have a significant impact on the cryptocurrency market. Not only will it provide institutional investors with easier access to Bitcoin, but it also has the potential to drive up demand and increase the value of the digital asset. The ongoing engagement and cooperation between the SEC and asset managers reflect the growing interest and maturity of the cryptocurrency industry. Exciting times are ahead as we eagerly await the SEC’s decision.

Regulation

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