The potential approval of a Bitcoin exchange-traded fund (ETF) seems imminent, spurred by asset management giant BlackRock’s plan to acquire $10 million worth of Bitcoin on Friday. This development has sparked speculation that the Securities and Exchange Commission (SEC) may be compelled to greenlight regulated cryptocurrency funds.
Bloomberg Analyst James Seyffart, speaking in a private webinar with CryptoQuant on Thursday, foresees the SEC granting approval to several Bitcoin spot ETF applications in the coming days. He suggests that a recent court ruling against the regulatory agency has left the SEC with little grounds to continue denying Bitcoin ETFs.
According to Seyffart, the SEC is now faced with limited options. Either they must devise new reasons for denial, which, given the court’s dismissal of previous grounds, seems challenging, or they could encourage applicants to withdraw. However, Seyffart believes that the SEC is in a tight spot and may have no choice but to approve the Bitcoin ETFs.
BlackRock’s Bitcoin Strategy Amidst Regulatory Developments
BlackRock’s intention to make a $10 million Bitcoin purchase has been disclosed through an amendment filing for its proposed spot ETF. This investment is sourced from the earnings generated by the fund’s initial seed capital investments made in October.
Although the seed purchase doesn’t serve as a definitive assurance of an ETF launch, James Seyffart suggests that it indicates BlackRock’s belief in the forthcoming approval from the SEC. In a parallel move, competing firm Bitwise announced last week that it is considering seeding its proposed Bitcoin ETF with a substantial amount, potentially up to $200 million.
Bitcoin ETF Applications Piling Up
Despite the Securities and Exchange Commission (SEC) having rejected numerous Bitcoin ETF applications in the past, the agency is now seemingly compelled to approve some, as outlined by Seyffart. He anticipates that official SEC approval for Bitcoin ETFs could materialize between January 8 and January 10.
The potential approval of Bitcoin ETFs holds significance as it would provide mainstream investors with convenient access to Bitcoin through brokerage accounts, marking a significant development for the cryptocurrency market. Historically, the SEC has cited concerns such as market manipulation in the Bitcoin space and a lack of regulation as grounds for rejecting previous ETF applications.
Currently, there are at least six companies awaiting SEC decisions on their Bitcoin ETF applications. If approved, these ETFs would open up the $850 billion Bitcoin market to a vast number of retail and institutional investors. The impending verdict from the SEC is eagerly anticipated within the financial community, with the outcomes expected to shape the future landscape of cryptocurrency investment.
