SEC Expected to Approve Spot Bitcoin ETF
TD Cowen, an investment bank, predicts that the U.S. Securities and Exchange Commission (SEC) will approve a spot bitcoin exchange-traded fund (ETF) by the Jan. 10 deadline. The bank believes that this approval is a “political necessity” for the SEC to establish itself as a crypto regulator before broader crypto legislation is considered by Congress. The proposal for the spot bitcoin ETF was submitted by Ark Invest and 21shares.
The Need for SEC to Cement its Role
According to TD Cowen, the SEC does not want to risk losing a legal challenge to its refusal of approving bitcoin ETFs. Last year, the SEC faced defeat in a legal battle against Grayscale Investments regarding its application to convert its bitcoin trust into a spot bitcoin ETF. The rejection was later reconsidered after a court ruling.
Crypto Legislation and Lame Duck Session
The U.S. Congress is currently reviewing several cryptocurrency-related bills. TD Cowen suggests that lawmakers have an opportunity to negotiate a comprehensive crypto market structure bill during the “lame duck” period after an election. The investment bank emphasizes that for the Senate and White House to support such legislation, the SEC needs to take the lead in protecting investors.
Hot Take: SEC Approval of Bitcoin ETF Essential for Crypto Regulation
TD Cowen’s analysis highlights the political necessity of the SEC approving a spot bitcoin ETF. With Congress considering broader crypto legislation, the SEC needs to solidify its role as a crypto regulator. Additionally, avoiding legal challenges and maintaining investor protection are crucial for the SEC’s credibility. This approval could pave the way for further crypto market regulations and influence lawmakers’ decisions. As the deadline approaches, the crypto community eagerly awaits the SEC’s decision on the spot bitcoin ETF proposal.
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