Spot Bitcoin ETF Approval Decision Pending
The U.S. Securities and Exchange Commission (SEC) has yet to make a decision on whether to approve Spot Bitcoin Exchange-traded Funds (ETFs). The crypto market is eagerly awaiting this approval, and Bitcoin derivatives traders are actively speculating on the outcome.
Bitcoin Futures Open Interest Reaches $19 Billion
In early December, the open interest in Bitcoin futures reached its highest level in two years, surpassing $19.2 billion. As of January 9, 2024, the total BTC futures open interest was recorded at $19.53 billion, indicating a significant increase compared to the previous day’s figure of $18.06 billion.
Raised Hopes for Bitcoin ETF Market Debut
Despite previous rejections, discussions and lobbying efforts have led to the SEC engaging with firms interested in issuing Bitcoin ETFs. This has raised hopes for the market debut of these investment vehicles.
Rising Funding Rates and Increased Premiums
Funding rates for Bitcoin across exchanges have been rising, indicating traders’ willingness to pay more to maintain long positions. Retail and institutional investors have also shown increased interest, leading to higher premiums for Bitcoin futures on the Chicago Mercantile Exchange (CME).
Bitcoin Price Surge and Increased Trade Volume
The price of Bitcoin surged over $45,000 on January 2, reaching a new high in two years. As of now, it is trading at $46,695.14 with a 6.28% increase. The cryptocurrency’s market cap has also gained 6.30% to reach $914.98 billion. Additionally, BTC trade volume has spiked by 71.47% to $41.13 billion as the anticipated approval date for Spot Bitcoin ETFs approaches.
Major Players Submit Final Amendments
As the January 10th deadline approaches, major financial players including BlackRock, Ark, Fidelity, Invesco, Galaxy Digital, WisdomTree, and Valkyrie have submitted final Form S-1 amendments to the SEC in a race to launch the first Spot Bitcoin ETF in the U.S.
Fee Reductions to Attract Investors
To attract investors, several applicants have announced significant fee reductions for their ETF products. Bitwise offered the lowest fee of 0.24%, while ARK & 21Shares will waive their 0.25% fee for the first six months post-listing. BlackRock has set an initial fee of 0.2% for the first six months or the first $5 billion in transactions, with a revision to 0.30% thereafter. Grayscale also reduced its fee from 2% to 1.5%.
Hot Take: Spot Bitcoin ETF Approval Could Transform Crypto Markets
The anticipated approval of Spot Bitcoin ETFs by the SEC has the potential to transform the crypto markets. It would provide institutional and retail investors with easier access to Bitcoin, leading to increased trading volume and liquidity. The approval would also signal a greater acceptance and recognition of cryptocurrencies by regulatory authorities. This could further fuel the growth and adoption of cryptocurrencies as mainstream investment assets. Overall, if approved, Spot Bitcoin ETFs could bring significant changes and opportunities to the crypto industry.
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