Reports indicate that there may be an extended wait before the US Securities and Exchange Commission (SEC) approves the numerous spit Bitcoin exchange-traded funds (ETF) applications. The regulator reportedly labeled the recent applications by investment managers as “inadequate.”
ETF Filings Not “Clear”
As The Wall Street Journal reported, the Nasdaq and the Chicago Board Options Exchange (Cboe) were recently informed by the securities regulator that their filings lacked clarity and weren’t comprehensive enough for approval. Moreover, the recent feedback is a message to other asset managers that have previously applied to the SEC for ETF approval.
The SEC reportedly raised concerns regarding the exchanges’ failure to specify the spot Bitcoin exchange involved in their “surveillance-sharing agreement” or provide adequate details about the surveillance arrangements. However, there is an opportunity for asset managers to rectify this through a resubmission of their filings with more transparent information to the regulator.
In the past few weeks, there has been a surge in Spot BTC ETF applications as BlackRock joined the ranks of firms aiming to launch Wall Street’s inaugural Spot Bitcoin ETF. BlackRock’s unique application introduced an innovative “surveillance sharing agreement” that facilitates market transactions and information sharing among entities.
Following BlackRock’s application, other fund managers took similar steps to revise their application for a Spot BTC ETF. They also incorporated a surveillance agreement similar to that of BlackRock.
In recent days, several other asset managers, such as Invesco, Valkyrie, WisdomTree, and Fidelity, have also resubmitted their applications. Nevertheless, reports suggest that ARK Invest is currently leading the pack in this competitive race for the first ETF approved by the US securities watchdog.
Rising Demand For ETF Products
ETFs have become increasingly popular as they allow investors to track a specific index and are traded on exchanges. Within the realm of cryptocurrencies, there exists a specialized type of fund known as a cryptocurrency ETF, which aims to mirror the price movements of one or more digital tokens within a diverse range of crypto assets.
While the US SEC has consistently declined to approve spot Bitcoin ETFs since 2017, the situation differs in Canada, where such financial products are already available to investors. Notably, three prominent funds in Canada—Purpose Bitcoin, CI Galaxy Bitcoin, and 3iQ CoinShares- have exposed investors to this crypto asset class.
Additionally, investors in Bitcoin ETFs can enjoy its potential growth and other opportunities it offers without too much direct risk exposure to it. Moreover, the availability of spot Bitcoin ETFs in Canada presents a unique landscape for cryptocurrency investment, offering a regulated and accessible avenue for individuals and institutions to explore the digital asset market.
As the demand for digital currencies continues to grow globally, the presence of established funds directly investing in spot Bitcoin further solidifies Canada’s position as a leading hub for crypto innovation and investment opportunities. Like Canada, Hong Kong also offers a Bitcoin and Ethereum-based ETF, with several institutional players already jumping on the ETF trend to expand their investment portfolios.
For the United States, observers believe that the regulator’s inability to provide the necessary regulatory guidelines and its aggressive approach will continue to hinder the realization of a crypto-based ETF in the country.
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