With the likelihood of a spot Bitcoin ETF approval increasing, Bitcoin’s price is gaining upward momentum, recently reaching a 19-month peak of $38,800. According to a Bloomberg analyst, the U.S. Securities and Exchange Commission (SEC) is expected to make a decision on the approval of a Spot Bitcoin Exchange-Traded Fund (ETF) between January 5th and 10th.
SEC’s Approval Window Begins
The launch of a Spot Bitcoin ETF has long been a topic of discussion in the market after BlackRock first filed for that. Such a fund would allow investors to gain exposure to Bitcoin without the need to directly purchase and store, thereby easing the investment process and potentially attracting a wide range of investors. This is expected to push the total crypto market cap by billions of dollars.
Additionally, Standard Chartered forecasts that the approval of an ETF could result in over 160% gains for the asset, potentially propelling it towards their projected $100,000 price target by the end of 2024.
The window for the SEC to approve a Spot Bitcoin ETF is set for January 5th to 10th. Bloomberg’s James Seyffart has verified these dates and the expected timeframe for the agency’s decision.
The SEC is currently reviewing over a dozen applications for Spot Bitcoin ETFs. Seyffart has indicated that the approval decisions are anticipated in the later part of this period, likely between January 8th and 10th.
Up until now, the SEC has continually postponed its verdict on the Bitcoin product. Yet, there’s an expectation that this will shift in early 2024. In particular, it’s predicted that decisions on several applications might be made as soon as January, following previously reported approval window.
The ETF Race Becomes Crowded
Amid increasing hopes that spot bitcoin exchange-traded funds (ETFs) may soon receive regulatory approval, certain firms in the ETF sector intend to abstain from the intense competition for market share.
Major players like ProShares, Amplify Investments, and Roundhill, are avoiding launching a bitcoin ETF. Their concerns center on the saturated market, high regulatory and marketing expenses, and doubts about sufficient demand to offset these costs.
However, the introduction of a bitcoin ETF, offering both retail and institutional investors a convenient investment, is anticipated to attract up to $3 billion from investors in the initial trading days and potentially billions more in subsequent periods.
SEC is also making active moves ahead of approving a spot Bitcoin ETF. The regulatory agency met with Grayscale and BlackRock to discuss their applications for spot Bitcoin ETFs.
BlackRock modified its In-Kind model to address SEC’s concerns and unresolved issues and Grayscale talked about turning its Bitcoin Trust into a spot ETF. The SEC’s primary concern is the direct handling of Bitcoin by U.S. broker-dealers, making investment risks. Consequently, the SEC proposed a “Cash” model as a safer alternative, although it complicates fund operations and involves more steps for BlackRock.
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