Significant Progress Made in Discussions Between SEC and Asset Managers over Bitcoin ETF Approval
The US Securities and Exchange Commission (SEC) has made significant progress in discussions with asset managers regarding the potential approval of Bitcoin exchange-traded funds (ETFs), according to Reuters. The talks have advanced to key technical details, indicating that the agency may soon approve these products.
Bitcoin ETF Approval Soon?
Thirteen firms, including Grayscale Investments, BlackRock, Invesco, and ARK Investments, are currently awaiting decisions from the SEC on their applications for spot ETFs. Historically, the SEC has been resistant due to investor protection concerns. However, a court ruling in August against the SEC’s rejection of Grayscale’s spot ETF application led to a change in the agency’s stance.
The discussions between the SEC and asset managers have covered various aspects such as custody arrangements, creation and redemption mechanisms, and investor risk disclosures. A spot Bitcoin ETF could potentially generate demand of up to $3 billion in the first few days.
The nature of the discussions suggests that the SEC may approve ARK’s application and some of the other 12 applications in the coming year. ARK CEO Cathie Wood expressed optimism about multiple ETF approvals at once.
The Pace Of Application Amendments Increases
Executives from BlackRock, Grayscale, Invesco, and 21 Shares have met with SEC staff since September. The pace of SEC information requests has also accelerated. Some recent meetings have taken place with staff in Chair Gary Gensler’s office.
Chair Gensler has not publicly indicated his stance on these filings. The primary sticking points include the settlement mechanism and addressing market manipulation concerns through surveillance arrangements with listing exchanges and Coinbase.
Hot Take: Potential Approval of Bitcoin ETFs Signals Mainstream Adoption
The progress in discussions between the SEC and asset managers over Bitcoin ETF approval indicates a significant step towards mainstream adoption of cryptocurrencies. If approved, these ETFs will provide investors with more accessible and regulated avenues to invest in Bitcoin. The potential demand for a spot Bitcoin ETF is expected to be substantial, highlighting the growing interest in digital assets among traditional investors.
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