The US Securities and Exchange Commission (SEC) is expected to announce its decision on several applications for exchange-traded funds (ETFs) that track the price of Bitcoin this week. According to Bloomberg, The outcome could significantly impact the crypto market and the wider adoption of Bitcoin as an investment asset.
A Bitcoin ETF is a fund that would allow investors to buy and sell shares that represent the value of Bitcoin without having to own or store the cryptocurrency directly. This would make it easier and cheaper for investors to access the Bitcoin market, as well as provide more regulatory oversight and transparency.
However, the SEC has been reluctant to approve a Bitcoin ETF, citing concerns over market manipulation, fraud, custody, and investor protection. Since 2013, the regulator has rejected or delayed dozens of applications for a Bitcoin ETF, including those from prominent firms such as VanEck, Bitwise, and Wilshire Phoenix.
The latest batch of applications, which include those from BlackRock and Fidelity, are for spot-backed Bitcoin ETFs, meaning that they would hold actual Bitcoin rather than futures contracts or other derivatives. These are considered to be more favorable by the crypto community, as they would reflect the true price of Bitcoin and avoid the risks and costs associated with futures trading.
SEC Decision Deadline Looms For ETFs
According to Bloomberg News, the SEC has until Jan. 10 to take action on at least one of the pending applications, and it may use that date to announce a series of decisions at once. The applicants have been given until Monday morning in Washington to submit any final revisions to their proposals.
The SEC has two main steps to approve a Bitcoin ETF. First, it has to approve the so-called 19b-4 filings, which are the requests from the exchanges that would list the ETFs, such as the New York Stock Exchange and Cboe Global Markets. Second, it has to approve the S-1 forms, which are the registration statements from the issuers themselves.
Bloomberg News reported that the SEC is planning to vote on the 19b-4 filings in the coming days, but it is unclear if it will also act on the S-1 forms at the same time. If the SEC grants both sets of approvals, the ETFs could start trading as soon as the next business day. An SEC representative declined to comment on the status of the applications.
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