The anticipation for the approval of a spot Bitcoin exchange-traded fund (ETF) might be realized this Wednesday. According to a report from Fox Business, BlackRock, the world’s largest asset manager and one of the contenders vying to launch a spot bitcoin ETF, is reportedly expecting its application to be approved.
BlackRock is among several firms that submitted updated 19b-4 filings on Friday for proposed spot bitcoin ETFs. Other notable companies in the mix include Grayscale Investments, Valkyrie, ARK 21Shares, and Invesco. Additionally, the Cboe BZX exchange filed forms for VanEck, WisdomTree, Pando Asset AG, and Franklin Templeton last week. The potential approval of a spot Bitcoin ETF could mark a significant development in the cryptocurrency investment landscape.
The potential approval of spot Bitcoin ETFs has generated high anticipation among cryptocurrency enthusiasts, who envision these funds attracting billions of dollars in fresh investments into the cryptocurrency market. The recent surge in the price of bitcoin further reflects the market’s enthusiasm for exchange-traded products that hold actual bitcoin rather than solely speculating on its price through futures contracts.
However, critics of cryptocurrencies have expressed concerns about the market’s volatility and the lack of regulation in the bitcoin space. The non-partisan nonprofit Better Markets, an advocate for increased financial regulation, penned a letter to the U.S. Securities and Exchange Commission (SEC), asserting that approving spot Bitcoin ETFs would be “a regulatory mistake of historic proportions.” This underlines the ongoing debate and differing perspectives surrounding the integration of cryptocurrency investment products into traditional financial markets.
Bitcoin Drops 8% after ETF Delay Rumors
On Wednesday, Bitcoin experienced a sharp decline to as low as $40,000 following a report from Matrixport that suggested the SEC is likely to reject spot Bitcoin ETF applications this month. Matrixport, in a post on X (formerly Twitter), stated, “Matrix on Target projects a January rejection for Bitcoin Spot ETFs by the SEC, cautioning traders to hedge long exposure.”
Despite this, there have been recent rumors suggesting that approval may be imminent. On Thursday afternoon, senior TechCrunch crypto reporter Jacquelyn Melinek mentioned that approval could happen within 24 hours, stating, “Heard from sources extremely close to the matter that the bitcoin spot ETF is going to be approved by the SEC for *multiple* firms’ applications… expecting something tomorrow.”
The uncertainty around the approval of spot Bitcoin ETFs has contributed to significant market volatility, with investors closely monitoring regulatory developments for potential impacts on cryptocurrency prices.
According to a Reuters report, discussions took place on Friday among investment management firms, stock exchanges, and the SEC regarding final wording changes on filings for spot Bitcoin ETFs. This step, if concluded, could potentially lead to the approval of the funds for the first time next week. Multiple issuers have expressed expectations of receiving final approval for S-1 filings by late Tuesday or Wednesday.
As the SEC approaches potential approval of the first Bitcoin ETF, issuers are striving to gain an early advantage in capturing investor interest. Notably, Fidelity has set a highly competitive fee of 0.39%, while Invesco/Galaxy announced a fee waiver for the initial six months of operation and for the first $5 billion in assets held, followed by a 0.59% fee. Analyst Eric Balchunas of Bloomberg has also predicted that BlackRock will likely set its fee at 0.47%. These fee structures add an additional layer of competition among issuers in the emerging market of spot Bitcoin ETFs.
