Crypto Analysts Predicts Rising Chances For Approval Of Bitcoin Spot ETF

Possibilities Of Spot ETF Approval Rises

With the clamor for a Bitcoin spot exchange-traded funds (ETF) gaining traction, crypto industry experts believe the regulator will likely approve most of the applications on its desk. Even though the regulator continues to postpone its decisions regarding these applications, analysts see the odds of imminent approval increasing.

Crypto industry enthusiasts and seasoned analysts are increasingly optimistic about the US Securities and Exchange Commission’s (SEC) approval of a Bitcoin spot ETF product. This renewed confidence follows the historic support for America’s first Ethereum futures ETFs earlier this week.

With this development, the crypto community and ETF advocates are more convinced that the commission is on the verge of approving a spot Bitcoin ETF offering soon. Industry players believe that the shift in sentiment reflects the SEC’s better understanding of the cryptocurrency market and its evolving relationship with traditional financial instruments.

A renowned crypto trader and analyst, Alex Krüger, opined that a spot Bitcoin ETF has a 70% chance of being approved by the SEC. Furthermore, he predicted that the approval may likely be granted in January 2024.

The trader asserts that the SEC’s endorsement would provide market participants with viable trading opportunities. In a post on X, “Mister Crypto” shared insights from a former BlackRock director, suggesting that the SEC might approve spot Bitcoin ETFs within three to six months from now.

This positive outlook is accompanied by a promising projection of capital inflows, expected to reach $200 billion.

SEC’s Cautionary Approach

The US regulator’s stance on spot-based crypto derivatives, which require physical possession of the underlying asset, has remained unchanged despite the widespread calls for approval. The SEC has consistently preferred derivatives based on futures contracts, citing concerns about price volatility and possible market manipulation.

Moreover, the regulator hopes to mitigate the risks associated with direct ownership of digital assets by focusing on futures-based derivatives as a viable alternative. In addition, the SEC’s approach is consistent with its primary mission of ensuring investor protection while encouraging financial sector innovation.

However, this regulatory stance has sparked debate within the crypto community, with advocates of spot-based derivatives arguing for better flexibility and liquidity. On the other hand, critics emphasize the need to safeguard users in a rapidly changing market with frequent price fluctuations.

As a result, regulators emphasize the need to balance innovation and investor protection to achieve progress.

Update On Pending Applications

Meanwhile, Eric Balchunas, a Bloomberg ETF expert, provided a vital update regarding the extensive list of pending applications as of October 4. First, he noted that the October 13 deadline is crucial for the SEC to appeal the Grayscale ruling.

Balchunas also said that the SEC is taking a break from discussing or deciding about spot-related filings but will resume by January 3, 2024. The Bloomberg analyst added that the SEC is proactively approaching these applications by collaborating with ETF issuers.

He said this engagement reflects the regulatory body’s commitment to scrutinizing the submitted applications appropriately and determining whether they meet its strict standards. Meanwhile, the October 17 deadline is critical in their push for Fidelity, VanEck, and WisdomTree regarding their ETF applications. However, recent indications suggest that the US regulator will defer deciding their applications till January.

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