The crypto community is holding its breath as the United States Securities and Exchange Commission (SEC) prepares to make a landmark decision on whether to approve the first spot Bitcoin exchange-traded fund (ETF). If approved, these ETFs would allow investors easy and regulated exposure to Bitcoin’s price movements within their brokerage accounts for the first time.
Rumors are circulating that Gary Gensler’s SEC could approve multiple spot Bitcoin ETFs as early as January 3. In response to growing market excitement, Bitcoin (BTC) broke the psychologically important milestone of $45,000. This represents its highest point since April 2022.
Multiple asset managers have applications pending before the SEC, with deadlines for decisions coming up on January 10. Recent amendments submitted to the SEC, combined with joint discussions between regulators and applicants, suggest the SEC may finally be ready to give some ETFs the green light.
According to a Reuters report , the SEC plans to inform some applicants of approval in the next few days. This will allow firms time to prepare for launch by January 10, coinciding with a deadline to approve or reject an application from Ark Invest and 21Shares. While the specific applicants likely to get approved remains unclear, more than a dozen major players, like BlackRock and Fidelity, filed updates on December 29th that adhere to SEC feedback.
If approved, spot Bitcoin ETFs could significantly expand investor access and capital flows into Bitcoin. Some analysts argue this could propel the cryptocurrency’s price to new highs. On the other hand, some caution that volatility and increased regulatory burdens could follow. Nonetheless, a spot Bitcoin ETF appears primed to transform the crypto markets.
However, rumors are running wild that approvals could come as early as January 3, according to podcaster Scott Melker . Although, according to FOX Business journalist, Eleanor Terrett , this may be too early. She cited the SEC’s recent holiday break and the fact that S-1 forms submitted on Thursday and Friday still have yet to be reviewed.
The SEC has rejected more than a dozen Bitcoin ETF applications in recent years, citing concerns around insufficient regulation and the potential for manipulation. However, extensive engagement between regulators and applicants over the past year suggests core issues are largely resolved.
Recent discussions have focused largely on operational models for creations, redemptions and custody of Bitcoin. Amendments emphasize cash creation and redemption models rather than in-kind transfers of Bitcoin. Strong surveillance-sharing agreements are also now in place to detect manipulation.
With spot ETFs already trading successfully in Canada and Europe, the SEC may finally view the market as mature enough to mitigate risks to US investors. Continued growth of the Bitcoin futures market and stricter overall regulation of the crypto industry likely bolsters the case as well.
The approval of even one spot Bitcoin ETF would represent a watershed moment for cryptocurrency adoption and mark the definitive arrival of digital assets into mainstream finance. Additional approvals would likely follow. These could unleash an influx of institutional capital,. This could, in turn, cause a surge in Bitcoin’s price, propelling the cryptocurrency firmly into the financial mainstream.