US regulators are expected to approve applications for the very first spot Bitcoin ETF (exchange-traded fund), as a Wednesday deadline looms. Image: Alesia Kozik, via Pexels
US regulators are expected to approve applications for the very first spot Bitcoin ETF (exchange-traded fund), as a Wednesday deadline looms.
Expectations are high, with speculators foreseeing that the Securities and Exchange Commission (SEC) will approve the Bitcoin ETF.
Approval of the ETF would allow investors to trade in Bitcoin on traditional stock exchanges, meaning that they would not be required to actually own the digital currency in order to enter the market.
The price of Bitcoin has soared in anticipation of the decision, rising by 6.8% overnight to more than US$47,000, its highest price since April 2022.
Bitcoin previously hit its all-time high of US$68,789.63 in November 2021.
Many crypto experts believe an approved ETF will bring new money into Bitcoin, appealing to mainstream investors who may hold reservations about purchasing cryptocurrencies directly.
However, some market participants believe that approval of a Bitcoin ETF could trigger a ‘sell the news’ event, causing a temporary drop in value.
Potential investors would not have to divert to a cryptocurrency-specific trading platform in order to put money into the currency, granting them a comparatively safe entry point into the market.
Issuers hoping to launch spot Bitcoin ETFs include BlackRock, Grayscale and Fidelity, all of which revealed their expected fees on Monday (US time).
These fees are typically some of the last details to be confirmed before an ETF launch, contributing to the belief that the ETF may finally receive the SEC’s approval.
The SEC has denied all spot Bitcoin ETF applications since 2013, citing investor protection concerns and the potential for fraud.
Some regulatory experts have remained sceptical, citing concerns about the volatility of the crypto market.
Michael Sonnenshein, Grayscale’s CEO, said that the company had been in frequent contact with the SEC over the recent months to discuss the product.
“It’s been very encouraging to work together to pave the way for these products to come to market,” said Sonnenshein, in an interview with Reuters.
The SEC’s decision is due on Wednesday, January 10, US time.
