Crypto Quill

The U.S. Securities and Exchange Commission (SEC) has issued additional comments on the pending S-1a applications of various Bitcoin ETF applicants, including BlackRock, the world’s largest asset manager. This is a standard procedural step and does not necessarily indicate a delay in the approval process, according to Bloomberg expert James Seyffart.

Bitcoin ETF Approval Expected by January 10

The SEC faces a deadline of January 10, 2024, to make a decision on these applications, which have been pending for months. The applicants, which also include Fidelity, VanEck, Valkyrie, and others, are hoping to launch the first spot Bitcoin ETFs in the U.S., allowing investors to gain exposure to the price of the leading cryptocurrency without having to buy or store it directly.

A spot Bitcoin ETF would track the actual price of Bitcoin, unlike the futures-based ETFs that rely on contracts that expire and roll over periodically. Many analysts and investors believe that a spot Bitcoin ETF would be more attractive and beneficial for the crypto market, as it would reflect the true demand and supply of Bitcoin, and potentially reduce the volatility and premium of the futures-based ETFs.

SEC Requests Further Comments on Bitcoin ETFs

In a recent development, the SEC has requested further comments from the public on the pending Bitcoin ETF applications, especially on the amendments made by the applicants regarding their fee structures and market-making arrangements. The SEC has also asked for comments on the potential impact of a Bitcoin ETF on the liquidity, efficiency, and integrity of the Bitcoin market, as well as the risk of market manipulation and fraud.

The SEC’s request for additional comments is part of the normal regulatory process, often necessitated by ongoing amendments or new developments in the market. Addressing this, Seyffart affirmed in a tweet that the SEC’s request for further comments is routine and not necessarily indicative of a delay. He added that he expects more amendments to be filed by the applicants in the coming days.

Crypto Community Remains Optimistic

Despite the SEC’s request for more feedback, the crypto community remains optimistic that the regulator will approve at least one of the Bitcoin ETF applications by the deadline. Seyffart and his colleague Eric Balchunas have pinned the chances of a spot Bitcoin ETF approval at 90% by January 10. They also noted that the fee war among the applicants could benefit the investors, as some of the proposed ETFs would charge less than 0.5% in annual fees.

The anticipation of a Bitcoin ETF approval has also boosted the price of the cryptocurrency, which surged above $47,000 on Monday, reaching its highest level since April 2022. Bitcoin is currently trading at around $46,500, up more than 6% in the past 24 hours, according to CoinGecko.

A Bitcoin ETF approval would be a landmark event for the crypto industry, as it would signify the recognition and acceptance of Bitcoin as a legitimate asset class by the U.S. regulators. It would also open the door for more institutional and retail investors to enter the crypto market, potentially driving the adoption and innovation of the technology.