Market Insiders Anticipate SEC’s Decision on spot Bitcoin ETF Approvals by Next Week: Report

Bits Logics Team . 31st Dec 2023

• Asset management firms are vying to secure regulatory approval from the U.S. SEC to launch spot BTC ETFs.
• Market insiders suggest that a decision from the SEC may be imminent, with notifications to issuers expected as early as next week.
• Bitcoin’s price surge is partly attributed to market expectations of SEC approval for a spot Bitcoin ETF.

In a recent report by Reuters, it has been revealed that asset management firms are vying to secure regulatory approval from the U.S. Securities and Exchange Commission (SEC) to launch exchange-traded funds (ETFs) tied to the spot price of Bitcoin. 

Notable firms such as BlackRock Asset Management, VanEck, Valkyrie Investments, Bitwise Investment Advisers, Invesco Ltd., Fidelity, WisdomTree Investments, and a joint venture between Ark Investments and 21Shares have updated their filings with the SEC, detailing arrangements with market makers to ensure efficient and liquid trading. Market insiders suggest that a decision from the SEC may be imminent, with notifications to issuers expected as early as next week if approvals are granted.

As of late Friday afternoon, these firms have submitted revised documents outlining the specifics of their market-making arrangements to the SEC, setting the stage for potential ETF launches. If issuers met their year-end filing revision deadlines, there is a possibility of launching by January 10, the date by which the SEC is obligated to either approve or reject the Ark/21Shares ETF.

Bitcoin’s price surge, more than doubling this year to nearly $42,000, is partly attributed to market expectations of SEC approval for a spot Bitcoin ETF. Should regulators give the green light, they could inform issuers as early as next week, opening new avenues for investors seeking exposure to the cryptocurrency market.

Valkyrie Investments, in its filing, disclosed a proposed management fee of 0.80% on the ETF if approved in the new year. Meanwhile, Ark and 21Shares had previously indicated a similar fee structure. The Fidelity Wise Origin Bitcoin Fund aims to be the most cost-effective, with fees as low as 0.39%.

Invesco, in its filing, outlined plans for a 0.59% fee and announced a fee waiver for the first six months on the initial $5 billion in assets attracted by the new fund.

A total of 14 asset managers are currently awaiting SEC approval for spot Bitcoin ETFs, reflecting the growing interest in mainstream financial products tied to cryptocurrencies. 

Historically, the SEC has rejected multiple attempts to launch such products, citing concerns about market manipulation and investor protection. If approved, these ETFs would mark a significant milestone as they differ from previously approved cryptocurrency ETFs, which were tied to futures contracts on Bitcoin and Ethereum, traded on the Chicago Mercantile Exchange.

Grayscale Investments and Hashdex, looking to convert existing products into spot Bitcoin ETFs, have also submitted updates to the SEC earlier this month. The SEC has not yet responded to requests for comment.