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- The crypto ecosystem is still anticipating the first spot Bitcoin ETF approval from the US SEC.
- The timeline for this approval is pegged at about 6 months from now, a move that can help trigger massive BTC price run.
A number of spot Bitcoin (BTC) Exchange Traded Fund (ETF) applications have reached the desk of the United States Securities and Exchange Commission (SEC) from top investment asset management firms with a strong foothold in the country.
Like every other ETFs which typically gives investors access to a particular asset without exposing them to the risks involved with it, Bitcoin ETFs are designed to give investors the ability to invest in BTC without holding the coin. This helps them bypass the challenges of storage and security.
As a hybrid between individual stocks and mutual funds, ETFs provide investors with a basket of assets including stocks, bonds, or commodities, all of which are tradable on major stock exchanges. Usually, mutual funds are priced only at the end of the trading day but in the case of ETFs, they are a reflection of the real-time price fluctuation of their underlying assets. Hence, investors can put them up for sale just as they would regular stocks.
Rather than having a direct ownership of BTC that comes with some complex storage and security problems, an investment in BTC in a format known to traditional investors is made possible through ETFs. Ultimately, the catch for a BTC ETF is its capacity to create a bridge between traditional finance and cryptocurrency.
Investors who are already used to the terrain of regular investments are opened to a more accessible avenue where they get to invest in crypto without the trouble of navigating the complexity of digital wallets and decentralized exchanges.
With many of these asset managers pushing to bag the first spot BTC ETF (the SEC has never approved one before now), the regulator is particularly concerned about the possibility of market manipulation, liquidity and the volatility of the nascent crypto market. This has caused a decision to linger for a few months as the SEC claims to be reviewing the numerous applications.
Multiple Spot Bitcoin ETF Applications From Asset Managers
So far, the SEC has received the following applications for spot Bitcoin ETF: iShare Bitcoin Trust from BlackRock, Bitwise Bitcoin ETP Trust from Bitwise, VanEck Bitcoin Trust from VanEck, WisdomTree Bitcoin Trust (BTCW) by WisdomTree, Invesco Galaxy Bitcoin ETF (a collaborative ETF from Invesco and Galaxy), Wise Origin Bitcoin Trust from Fidelity, Valkyrie Bitcoin Fund (BRRR) from Valkyrie and ARK 21Shares Bitcoin ETF (ARKB) from 21Shares and ARK Invest.
In the meantime, the ARK 21Shares ETF is leading the pack, having resubmitted an application two months before BlackRock filed its first spot Bitcoin ETF application.
Cboe, the exchange planning to list the proposed ARK 21Shares Bitcoin ETF, mentioned plans to enter into a surveillance-sharing agreement with a “United States-based spot trading platform for bitcoin” just like the SEC requested and also to enhance the strength of their application.
Still, BlackRock’s application approval is expected within the next six months based on speculations. In all, the market regulator has hinted broadly it will not approve any of these spot BTC ETF until next year and a potential approval is bound to help fuel the rally of Bitcoin toward the $150,000 price level.
