The long road to regulatory approval for a Spot Bitcoin ETF in the United States may finally be coming to an end. As US investors eagerly await access to a regulated Bitcoin investment product, analysts believe January 2024 could prove to be the make-or-break month for approval after years of denials and delays.
A Bitcoin ETF would allow traditional investors to gain exposure to the price of Bitcoin through traditional stock market infrastructure. Instead of having to buy and hold cryptocurrencies directly, investors could simply trade an SEC-registered security designed to track the market value of Bitcoin.
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Despite the proliferation of Bitcoin ETFs around the world, the SEC has consistently rebuffed attempts to introduce a spot BTC ETF, citing concerns about market manipulation in the volatile cryptocurrency space. However, SEC Chairman Gary Gensler announced in December 2023 that the regulator was “taking a new look” at BTC ETF spot applications. This signals a potential change in position.
Contenders in the Bitcoin ETF Race
Many major financial players are vying for the coveted approval of the Bitcoin ETF.
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- black rock: The world’s largest asset manager, managing over $9 trillion, filed for a spot BTC ETF in June 2023. Proposal names Coinbase as crypto custodian and spot market data provider , with BNY Mellon as liquidity custodian.
- Shades of grey: A major crypto investment fund manager, Grayscale, managing over 600,000 BTC, filed to convert its GBTC Bitcoin trust into a spot Bitcoin ETF in October 2021.
- Bitwise: After an initial rejection in 2019, Bitwise refiled its spot Bitcoin ETF application in 2021. This time, opting for direct trading based on Bitcoin rather than futures contracts.
- tree of wisdom: Already running a Bitcoin ETF on the Swiss SIX exchange, WisdomTree joined US Bitcoin ETF hopefuls in March 2021.
- Invesco Galaxy: Galaxy Digital and Invesco filed for a joint Bitcoin ETF in September 2021. They offer an ETF physically backed by Bitcoin rather than derivatives.
- Valkyrie: A newcomer, Valkyrie, filed its first application in January 2021, referencing the Chicago Mercantile Exchange’s Bitcoin price for its ETF.
- ArchInvestment: Led by Cathie Wood, Ark Invest filed for the Ark21Shares ETF in June 2021, in collaboration with Swiss-based ETF provider 21Shares AG.
- VanEck: One of the first applicants, VanEck made his first attempt at creating a Bitcoin ETF in 2018. After withdrawing in 2019, he reapplied in December 2020.
- loyalty: Applying in March 2021, Fidelity sought approval of the Wise Origin Bitcoin Trust, with Fidelity Digital Assets as custodian.
- Hashdex: Latin America’s largest crypto asset management company, Hashdex, entered the race in August 2023, proposing to convert its existing Bitcoin futures ETF into a spot ETF.
- Franklin Templeton: Joining the race in September 2023, Franklin Templeton, with approximately $1.4 trillion in assets under management, is in the running for approval.
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Optimism for Spot Bitcoin ETFs at an all-time high
As all applicants submit their final 19b-4 amendments, optimism is high in the industry. CNBC even made a prediction, expecting Spot Bitcoin ETFs to be approved this week, and trading could begin soon after. Additionally, this optimism has fueled an advertising battle and pricing competition among major asset management firms, including BlackRock, Fidelity and Grayscale.
With the SEC poised to make a decision, the crypto and traditional finance communities eagerly await the outcome that could reshape the Bitcoin investment landscape in the United States.
reference: watcher.guru