A High-Stakes Week for Bitcoin ETFs in the US
This week marks a crucial moment in the effort to launch exchange-traded funds (ETFs) backed by Bitcoin in the US. Aspiring Bitcoin ETF issuers have until Monday morning to make any last-minute revisions to their applications. The US Securities and Exchange Commission (SEC) has until January 10th to take action on at least one of these applications, which could result in multiple decisions being announced simultaneously.
The Technical Requirements for a Bitcoin ETF
There are two technical requirements that must be met before a spot-backed Bitcoin ETF can begin trading. Firstly, the SEC must approve the 19b-4 filings submitted by the exchanges that would list the ETFs. Secondly, the regulator must give its approval for the relevant S-1 forms, which are the registration applications from potential issuers such as BlackRock and Fidelity.
Bloomberg News reports that the SEC is planning to vote on the exchanges’ filings in the coming days. It remains uncertain whether they will also take action on the issuers’ applications at the same time. If both sets of approvals are granted, the ETFs could start trading as early as the next business day.
The Potential Impact of a Bitcoin ETF Approval
An approval for Bitcoin ETFs backed by the largest cryptocurrency would be a significant milestone for digital assets. This move could attract billions of dollars from both retail and institutional investors.
Michael Anderson, co-founder of crypto venture firm Framework Ventures, believes that “the market is still seriously underestimating the potential impact of a Bitcoin ETF approval.” However, previous SEC administrations have been hesitant to approve such products due to concerns about investor protection and market manipulation.
Speculation has grown since August when the SEC lost a legal battle against crypto asset manager Grayscale Investments. Many anticipate that the regulator will have to give in to the growing demand for Bitcoin ETFs.
Market Impact and Current Bitcoin Price
Market expectations of regulatory approval have fueled a 160% increase in Bitcoin last year. However, this was not enough to reach the record highs seen in November 2021 when Bitcoin almost reached $69,000.
Since the beginning of 2024, Bitcoin has remained relatively stable around $44,000. As of Monday morning in Singapore, it dipped about 2% to $43,400, along with a broader decline in the cryptocurrency market at the start of the week.
Hot Take: The Future of Bitcoin ETFs
The deadline week for Bitcoin ETFs in the US represents a pivotal moment for the cryptocurrency industry. The potential approval of these ETFs could open up new avenues for investment and significantly impact the market. While previous SEC administrations have been hesitant, there is growing speculation that they may finally give in to the demand for Bitcoin ETFs. The outcome of this week’s decisions will be closely watched by investors and enthusiasts alike as they eagerly await a potential breakthrough for digital assets.
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