SEC on the Verge of Decision: Anticipating Bitcoin Spot ETF Approvals
Summary:
This article discusses the SEC's impending decision regarding Bitcoin spot exchange-traded fund (ETF) listings, with a deadline of January 10. While many Bitcoin spot ETF applications are in the pipeline, no official announcement has been made yet. The approval of a single spot crypto investment vehicle could open the door for more, according to industry analysts. A report suggests that despite Bitcoin's bullish trends, ETF applicants may not have met the necessary SEC approval requirements. Some experts predict that the SEC is likely to approve Bitcoin spot ETF from entities like ARK Invest based on recent interactions with major exchanges and legal precedents.
Speculations are abound as the SEC (Securities and Exchange Commission) gears up to reach a decision regarding the listing of a Bitcoin spot exchange-traded fund (ETF) before the January 10 deadline approaches. As we await the Commission's verdict, there’s no confirmation yet whether any of the numerous Bitcoin spot ETF applications in the queue would receive the green light. The SEC has until the 10th of January to either decline or accept the Bitcoin ETF from 21Shares and ARK Invest. Industry analysts are of the view that if one spot cryptocurrency financial instrument gets approved, it could pave the way for several others.
Markus Thielen from 10x Research published a report on January 3 suggesting that optimism surrounding Bitcoin’s price movement notwithstanding, ETF applicants might have fallen short of satisfying the prerequisites for SEC approval. The report’s release comes at a time when it is believed the SEC is convening meetings with key exchanges to any comments on applications from spot crypto ETF providers.
Thielen said, “Market consensus largely anticipates the SEC’s approval of Bitcoin Spot ETFs by next week. Yet, we see a chance to counter the consensus," highlighting the inherent risk in positioning in view of events with significant price effects. He further added, "Despite the frequent interaction between ETF applicants and the SEC resulting in reapplications, we maintain an opposing perspective, arguing that all proposals have failed to satisfy a key criterion for SEC’s approval, probably ending in rejection in January.”
Moreover, experienced market observers are prophesizing that approvals from SEC for offerings from ARK Invest and others might be on the horizon in the upcoming ten days, heavily influenced by meetings with representatives from exchanges and prior legal rulings. Last October saw the commission revisiting an application from Grayscale Investments for a Bitcoin spot ETF after a legal decision deemed its refusal as “not based on substantial reasoning.”
Some analysts like James Murphy, the founder of Ludlow Street Advisors, anticipate multiple approvals on Jan. 10, he stated on X, "Following the incident with Grayscale, it appears that the SEC has exhausted all its arguments. If the Court discerns the SEC’s novel reason for a possible rejection as merely an excuse, it would discard it and may possibly consider sanctions against SEC lawyers."
The SEC has yet to sanction a Bitcoin spot ETF for listing and trading on any US exchange, despite having numerous applications from asset management companies over the years. However, interest rekindled when BlackRock — presently the biggest asset management firm in the world — made its application for a Bitcoin spot ETF in the United States in June 2023, leading many to believe that the SEC has to make a move sooner or later.
Thielen, who is also a Matrixport crypto trading platform analyst, on January 2 postulated in a report that the “SEC will dismiss” a Bitcoin spot ETF. After this report was distributed widely through various social media and news websites, Matrixport founder Wu Jihan specified on X that it was designed primarily for the company’s clientele instead of the media.
Published At
1/3/2024 8:30:00 PM
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