The SEC may approve a Bitcoin ETF soon, marking a major step for cryptocurrency in the US.
Investors watch for low fees, with Fidelity leading at 0.39% and rumors of BlackRock investing $2 billion.
The crypto world is on the edge as the United States Securities and Exchange Commission (SEC) approaches a pivotal moment that could mark a historic shift in cryptocurrency. Investors, enthusiasts, and industry experts are closely watching for the SEC’s decision to approve a spot Bitcoin Exchange-Traded Fund (ETF), expected to be made by Wednesday, January 10.
Bloomberg analysts James Seyffart and Eric Balchunas have projected a 90% chance of the SEC giving the green light to this groundbreaking development. This decision, if realized, underscores the SEC’s progressive stance under the leadership of Chairman Gary Gensler.
Five Key Factors Shaping the Bitcoin ETF Landscape
Nate Geraci, President of the ETF Store and co-founder of the ETF Institute, has outlined five critical factors that are shaping the Bitcoin ETF landscape:
Fee disclosures: There is a lot of competition in this market, and the performance of these ETFs largely depends on their cost structures. Notably, Fidelity is first among the group with a competitive charge of 0.39%, closely followed by Invesco at 0.59%.
SEC’s approval vote: Two particular technical requirements must be satisfied for a spot-backed Bitcoin ETF to be approved. The SEC must approve the 19b-4 paperwork the exchanges want to file to list the ETFs.The regulator must approve the relevant S-1 forms, which serve as the registration applications from the potential issuers.
Potential launch date: Regarding the possible release date of these ETFs, there is a lot of conjecture; some people think they might go live as early as this Thursday. Investor money pouring into these exchange-traded funds (ETFs) is a much-observed development, with reports that ARK may invest more than $200 million and BlackRock may contribute $2 billion.
Grayscale’s role: The market is also observing if Grayscale’s GBTC will uplist or convert on the same day as the launch of other ETFs. Geraci thinks this might occur based on signals from executives, filings, and overall industry activity. When Grayscale launches, its $27 billion in assets might right away place it among the top ETFs in assets under management (AUM).
Marketing strategies: The marketing strategies adopted by entities entering the Bitcoin ETF market are under scrutiny, especially given the restrictive advertising rules under the ’33 Act. Bitwise, Hashdex, and VanEck have already showcased their approaches. Observers are curious about what strategies BlackRock, Fidelity, Invesco, ARK, Grayscale, and others will employ.
Predictions and Expectations
Scott Johnsson, a finance lawyer at Davis Polk, has outlined his predictions for the timeline and approval probabilities. According to his estimates:
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The final S-1/3 filings will be completed on Monday.
On Wednesday, 19b-4, approval orders will be issued post-close.
Thursday will see requests for acceleration from issuers.
Friday will mark the notice of effectiveness filed by the SEC.
Trading will commence the following Tuesday
Johnsson assigns increasing probabilities of approval at each stage, culminating in a 100% chance of trading approval.
This week holds immense significance for Bitcoin ETFs in the United States. The SEC’s decisions on 19b-4 filings and S-1 forms represent the final hurdles that could propel Bitcoin’s integration into mainstream financial markets.
Market Dynamics’ Impact on Bitcoin’s Price
Beyond the regulatory developments, market dynamics continue to influence Bitcoin’s price. The cryptocurrency is in an uptrend that started in September 2023, with higher highs and higher lows. The $45,000 level holds psychological significance for Bitcoin holders. Recent on-chain data indicates substantial buying activity around this level.
Bitcoin Global In/Out of the Money. Source: IntoTheBlock
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