One Week Before Potential Spot Bitcoin ETF Approval: Everything You Need to Know

10 months ago 5

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Sources inside the US Securities and Exchange Commission (SEC) claim the agency could start notifying spot Bitcoin exchange-traded fund (ETF) applicants of approvals by Friday. Grayscale Investments and Fidelity Investments created excitement by filing an 8A securities registration form today.

Bloomberg analyst James Seyffart predicts that most successful applicants will be operationally ready to launch their ETFs within days rather than weeks, as previously thought. The approval dates are set from Jan. 8 – Jan. 10, 2023, almost ten years after the first attempt.

Grayscale SEC Filing Stokes Bitcoin Spot ETF Hype

The excitement around the approvals comes amid a flurry of filings discussing authorized partners and securities registration. Seyffart’s colleague, Eric Balchunas, predicted that companies would rush to name authorized partners in the lead-up to the approval deadline.

Seyffart says the 8A form filed by Grayscale and Fidelity is part of the process of listing an ETF and is not itself a sign of approval. It is a filing that depends on the effectiveness of the applicant’s S-1 filing. The S-1 filing is, in turn, dependent on the SEC approving a 19b-4 form.

However, efforts by Grayscale have received attention because of the company’s first-mover advantage in bringing Bitcoin to institutional investors through its Bitcoin Trust. Grayscale fought hard to overturn the SEC’s refusal to allow the conversion of the Trust into a spot Bitcoin ETF.

Its CEO, Michael Sonnenshein, supports the approval of multiple ETFs at once despite Grayscale being a pioneer in the space. He said that any approved and operationally ready applicant should be allowed to enter the market as soon as possible.

“I think that the SEC should and does, in fact, want to create an even playing field. We’ve publicly been advocates of the fact that when the commission is ready to give the requisite approvals for spot products to come to market, that it should be done all at once.”

Industry Reflects on Impact of Bitcoin Spot ETFs

The encroaching deadline has elicited a variety of responses from market players. If the SEC doesn’t approve spot Bitcoin ETF applications, ETF investment adviser Nate Geraci thinks lawsuits could follow.

When asked about his views on whether the Bitcoin futures market is threatened by a spot ETF, Simeon Hyman of ProShares insists that the futures market is more well-regulated and is not threatened. Crypto investment provider Matrixport may have caused a major Bitcoin selloff yesterday after releasing a report downplaying the chances of an ETF approval on political grounds.

Brian Kelly, the Founder & CEO of BKCM LLC, a digital asset investment firm, said a selloff after ETF excitement reaches a fever pitch is inevitable. Speaking on CNBC this week, Kelly said,

“I do think a lot of the speculative fever around the ETF is probably reaching a crescendo this week. So, yeah, could we get a selloff. But I think that would be…a dip to buy, because remember, there are still a lot of people that have not been able to buy bitcoin for their portfolio.”

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