In a significant development, the US Securities and Exchange Commission (SEC) has taken an unprecedented step that has raised hopes of approving bitcoin spot exchange-traded funds (ETFs). This move comes after the SEC recently delayed bitcoin spot ETF applications from major financial players like BlackRock, Fidelity, and VanEck due to the impending US government shutdown last week.
Renowned ETF analysts Eric Balchunas and James Seyffart had previously estimated a 75% chance of approval for these ETFs earlier this year. However, this prospect appears to be in doubt due to recent delays.
Is bitcoin Spot ETF Imminent? This is what the SEC did
The new focal point in seeking approval of the bitcoin spot ETF is January 10, 2024, coinciding with the expiration of the last deadline for Ark Invest/21 Shares. The bitcoin and ETF community is watching closely to see if the SEC approves this. Surprisingly, the SEC has offered an encouraging signal, something that has not been seen in the long history surrounding the approval of a spot ETF.
Bloomberg Senior ETF Analyst Eric Balchunas drew attention to this development in a recent tweet. Balchunas tweeted in response to another This has not happened before.” Balchunas revealed:
Yes, while the SEC delayed bitcoin spot filings last week, it also sent comments to issuers to address their S-1 filings (plumbing-related, legal). This is a break from the typical pattern of delay, delay, radio silence, then denial. A welcome sign in my opinion, although the timeline is unclear.
In response to questions about what “plumbing” means in the context of ETFs, Balchunas clarified: “the process of creation, redemption, custody, legal liability, things like that.” ETF “plumbing” essentially encompasses the operational and technical infrastructure that underpins ETFs, including processes related to creation and redemption mechanisms, asset custody, and legal aspects. These elements are crucial to the efficient functioning of ETFs and to maintaining the alignment of their prices with the assets they track.
Another reason to be optimistic
Additionally, the SEC is willing to provide another reason that could increase the chances of bitcoin spot ETF approval. The SEC is expected to approve nine ethereum futures ETFs today, effectively eliminating its ability to deny bitcoin spot ETFs while allowing ethereum futures ETFs. Previously, it was believed that the SEC could take this step because it was the only way to justify that the underlying bitcoin market is manipulated and inadequately regulated.
However, Nate Geraci, president of ETF Store and host of the ETF Prime podcast, Offered an alternative perspective. Geraci noted: “If the SEC allows the launch of eth futures ETFs, we have to assume that forcing the closure/delisting of btc futures ETFs is off the table… Fascinated to see the response from the SEC to court ruling in grayscale. The only options are to allow spot btc ETFs or find another reason to deny (custody?).”
In conclusion, these recent developments indicate a pivotal moment in the ongoing effort to secure regulatory approval for bitcoin spot ETFs in the United States. While the outcome remains uncertain, the SEC’s recent actions have injected new hope, suggesting that approval may be within reach.
btc was trading at $28,343 at press time, up 4.4% in the last 24 hours.
Featured image from Shutterstock, chart from TradingView.com
