US SEC Takes Unprecedented Step Towards Approving Bitcoin Spot ETFs
The US Securities and Exchange Commission (SEC) has made a significant move that raises hopes for the approval of Bitcoin spot exchange-traded funds (ETFs). This comes after the SEC delayed applications for Bitcoin spot ETFs from major financial players due to the recent US government shutdown.
Prior to the delays, renowned ETF analysts predicted a 75% chance of approval for these ETFs. However, this outlook is now uncertain.
What the SEC Did to Pave the Way for Bitcoin Spot ETFs
The focal point in the pursuit of Bitcoin spot ETF approval is January 10, 2024, which coincides with the expiration of the last deadline for Ark Invest / 21 Shares. The SEC’s decision on this application will be closely watched by the Bitcoin and ETF communities. Remarkably, the SEC has provided an encouraging signal, which is unprecedented in the history of spot ETF approval.
Eric Balchunas, senior ETF analyst for Bloomberg, highlighted this development in a recent tweet. Balchunas mentioned that while the SEC delayed spot bitcoin filings, they also sent comments to address S-1 filings related to operational and legal aspects. This departure from their usual pattern of delay is seen as a positive sign, although the timeline remains unclear.
Understanding “Plumbing” in ETF Context
“Plumbing” in ETFs refers to processes such as creation/redemption mechanisms, custody of assets, and legal liability. These elements are essential for efficient ETF functioning and maintaining price alignment with tracked assets.
Another Reason for Optimism
The SEC’s approval of nine Ethereum futures ETFs is expected today. This move could increase the chances of Bitcoin spot ETF approvals, as it removes the SEC’s ability to deny Bitcoin spot ETFs while still allowing Ethereum futures ETFs. Previously, it was thought that the SEC might take this step to justify concerns about the manipulation and inadequate regulation of the underlying Bitcoin market.
Nate Geraci, President of the ETF Store, offers an alternative perspective. He suggests that if the SEC allows ETH futures ETFs to launch, it indicates that forcing the closure/delisting of BTC futures ETFs is off the table. The SEC’s response to the Grayscale court ruling will be crucial in determining whether spot BTC ETFs are allowed or denied for another reason like custody concerns.
Hot Take: A Pivotal Moment for Bitcoin Spot ETF Approvals
These recent developments represent a critical moment in the ongoing effort to secure regulatory approval for Bitcoin spot ETFs in the US. While the outcome is still uncertain, the actions of the SEC have brought fresh hope that approval may be within reach.
BTC traded at $28,343 at press time, with a 4.4% increase in the last 24 hours.
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