Bitcoin ETFs Approval In Doubt as SEC Reviews Applications
In a recent development concerning the pending and much-anticipated spot bitcoin exchange-traded funds (ETFs), Fox Business reporter Eleanor Terrett suggested that the approval of Bitcoin ETF applications submitted last year by many crypto-related companies, including BlackRock and Coinbase, is in doubt as the United States Securities and Exchange Commission (SEC) is currently reviewing the applications.
Ever since the court order mandated the SEC to revisit its negative stance on spot bitcoin ETFs in 2023, instructing it to come up with another decision before the end of January 2024, the topic has been one of the most anticipated events in the US financial sector and the global crypto community. Giving an update on the topic, Eleanor Terrett of Fox Business analyzed that the probability of the SEC approving the applications is now critical.
Terrett added that the commission is currently reviewing the ETF applications through a methodical and well-detailed process to ensure all regulatory criteria are satisfied before granting any company’s application. Also, he explained that the regulator needed to be thorough with its review process because it is crucial for the future of spot Bitcoin ETFs.
SEC Reviews Spot Bitcoin ETF Applications
In addition, the Fox Business reporter revealed the current situation with the SEC’s approval procedure for Bitcoin ETFs. According to him, the SEC has changed its reviews for the ETFs to S-1 filings. He added that the step is crucial as it serves as notice to issuers concerning the final day on which their Form S-1 filings would be released. The timeline of the procedure is similar to that of Ethereum futures ETFs in 2023.
Furthermore, Terrett revealed that the SEC’s review strategy is comprehensive and methodical to ascertain that all firms met the required standards in their applications before being granted. Also, he added that the commission’s staff is currently on break, and this could place a strain on the deadline of the approval, possibly in the next 48 hours.
Regardless, the potential outcome of the whole case is yet unknown, as it will be critically deliberated and decided on by the appropriate authority in the next two weeks. It is important to note that the fate and future of spot Bitcoin ETFs depend on the SEC’s final decision.
Crypto Industry & Community Anticipates SEC’s Decision
Meanwhile, as the deliberation on the event continues, the crypto market has reacted optimistically to the latest developments. This is evident as the price of the primary crypto asset, Bitcoin, impulsively rose above the $45,000 price level, which it last witnessed in April 2022. The massive surge in price reveals that the crypto market earnestly anticipates a positive result from the US SEC.
Endorsing a spot Bitcoin ETF would be a huge achievement for the global crypto ecosystem, as it can cause a global mainstream adoption and investment in Bitcoin and other crypto assets. Meanwhile, many major players are anxiously anticipating the outcome, including Grayscale, Fidelity Investments, Valkyrie, Invesco, Wisdom Tree, and Ark Investment, as well as the entire crypto community.
According to the report, spot Bitcoin ETFs have the potential capacity to mirror the price of Bitcoin to offer investors a more direct and less risky exposure to the price actions of crypto assets. Spot Bitcoin ETFs are dissimilar to futures ETFs because they use actual BTC holdings as backups, offering a real connection to the underlying crypto asset.
SEC’s Decision Decides Spot Bitcoin ETF’s Fate
In addition, whatever decision the SEC comes up with would have a huge impact on the crypto market because endorsing the financial instrument, ETF, could begin a new era marked by regulatory acceptance and massive participation from institutional investors in the crypto industry. Spot Bitcoin ETFs present an opportunity to trade Bitcoin in a safer and more regulated platform for investors, consequently attracting more investors.
However, a delay or denial in the event could hugely mess with the spiraling enthusiasm in the market, leading to a possible reevaluation of the near-term options for institutional investments in crypto. Moreover, the outcome is pivotal to the ongoing discussion between regulatory agencies and the crypto industry.
As the deadline for the SEC’s decision approaches, all eyes are on the commission, depicting that a lot depends on its decision. If the SEC decides to approve, delay, or deny the applications, its decision would significantly affect the market dynamics as well as the sentiment of institutional investors in the digital asset industry.
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