Over the past few months, several prominent hedge funds, including traditional giants and those specializing in cryptocurrencies, have submitted applications for Bitcoin ETF approvals to the SEC. It is widely anticipated that the SEC might grant approvals as early as next month. In this article, we will review the major Bitcoin ETFs awaiting the SEC approval. The approval of the first US Bitcoin ETFs is expected to be a profound, market-changing event for the investment and crypto industries.
Why Are Bitcoin ETF Approvals Big Deal for Crypto?
The cryptocurrency industry has experienced significant growth in recent years, but it still pales in comparison to the traditional stock market in terms of trading volumes and investment amounts. Access to the regulated stock market has the potential to provide a significant boost to investments in crypto. Bitcoin ETFs represent the most significant financial product that investment funds are hoping to introduce to the stock market.
The primary reason why the industry hopes to boost investment volumes lies in the domain of regulation. Many investors remain hesitant to enter the world of Bitcoin investments due to the unregulated nature of the crypto market. If approved, Bitcoin ETFs will remove that hurdle.
This year has marked a crucial turning point as several leading investment funds, including industry giants like Fidelity and BlackRock, have taken proactive steps by submitting applications for Bitcoin ETF approvals. If these applications are approved, we can anticipate a significant surge in Bitcoin investments. This development has the potential to bridge the gap between the traditional financial markets and the cryptocurrency space, offering investors a regulated avenue to participate in the Bitcoin market.
SEC Stance on Bitcoin ETFs
The SEC has thus far displayed reluctance in approving any Bitcoin ETFs, but the mounting number of applications in its queue is intensifying the pressure on the regulator to yield to market demand. In reality, the SEC has few valid reasons to persist in resisting these approvals. The cryptocurrency market, despite its lack of comprehensive regulation, offers a legitimate product in the form of Bitcoin ETFs.
As recently as two days ago, the SEC chose to defer a decision on the latest Bitcoin ETF application, by ARK & 21Shares, and continues to prolong the process.
However, due to the increasing influx of applications from reputable hedge funds, the SEC has shifted its stance from outright rejection, as it had done in the past, to employing various delaying tactics to slow down the approval process. Many observers now speculate that the SEC finds itself in a difficult position and may have little choice but to grant approval for the first US Bitcoin ETFs, possibly as early as next month.
Major Bitcoin ETFs Vying for Approval in 2023
As of today, the following spot Bitcoin ETFs are vying for the SEC approval:
ARK 21Shares Bitcoin ETF
This Bitcoin ETF is offered jointly by Florida-based ARK Investment and Swiss-based crypto investment firm 21Shares. 21Shares is one of the leading crypto funds in the market. By partnering with the US-based ARK Investment, the Swiss crypto firm hopes to find an easier route into the American ETF market.
The ETF is based on holding the Bitcoin cryptocurrency as its underlying asset. The ARK 21Shares Bitcoin ETF was first filed with the SEC in 2021. In March 2022, the SEC rejected the application, but the two companies behind the product continued their efforts to get it approved. On 26 September, the SEC delayed a decision on the re-filed ETF for another 60 days.
BlackRock iShares Bitcoin ETF
BlackRock is among the most influential investment funds to submit an application for a Bitcoin ETF. The company submitted its application to the SEC in mid-June. iShares Bitcoin ETF plans to invest mostly in Bitcoin, possibly with some part of the fund allocated to blockchain-focused equities. BlackRock has nominated the Coinbase crypto exchange as the custodian for the Bitcoin funds in the ETF.
On 31 August, the SEC postponed a decision on the iShares Bitcoin ETF until October. The deadline for a decision on BlackRock’s product is 17 October. While even this deadline might be further extended, anticipation is building up that the SEC will finally approve the Bitcoin ETF next month.
Other Funds in the “31 August Batch”
When the SEC announced its decision to postpone the approval of the iShares Bitcoin ETF on 31 August, BlackRock wasn’t the only firm to feature in the regulator’s statement. On that day, the SEC named several other investment managers whose Bitcoin ETF applications were delayed in bulk, all until October. The other firms in the “31 August batch” are Fidelity, Wisdom Tree Funds, Invesco, Valkyrie Funds, and Galaxy Digital.
All of these fund managers will hear about the SEC’s decision on their Bitcoin ETF applications next month. However, there is still a possibility that the regulator might further extend the deadlines. If the SEC continues to play the “let’s talk about it later” game in October, the final deadline by which it has to provide a definitive answer is January 2024.
How Likely is SEC Approval for Bitcoin ETFs?
The crypto investment world is eagerly awaiting the month of October. The SEC will have to provide some form of answer to the bidding investment funds. This might be an approval, rejection, or further delay for another couple of months to buy more time.
The good news is that the market is feeling fairly confident about the eventual approval of spot Bitcoin ETFs. Analysts at Bloomberg are estimating a 75% chance that the first US Bitcoin ETFs will get the SEC’s tick of approval by the end of this year, even if not in October. Fingers are kept crossed across the investment fund industry.
Why Are Bitcoin ETF Approvals Big Deal for Crypto?
The cryptocurrency industry has experienced significant growth in recent years, but it still pales in comparison to the traditional stock market in terms of trading volumes and investment amounts. Access to the regulated stock market has the potential to provide a significant boost to investments in crypto. Bitcoin ETFs represent the most significant financial product that investment funds are hoping to introduce to the stock market.
The primary reason why the industry hopes to boost investment volumes lies in the domain of regulation. Many investors remain hesitant to enter the world of Bitcoin investments due to the unregulated nature of the crypto market. If approved, Bitcoin ETFs will remove that hurdle.
This year has marked a crucial turning point as several leading investment funds, including industry giants like Fidelity and BlackRock, have taken proactive steps by submitting applications for Bitcoin ETF approvals. If these applications are approved, we can anticipate a significant surge in Bitcoin investments. This development has the potential to bridge the gap between the traditional financial markets and the cryptocurrency space, offering investors a regulated avenue to participate in the Bitcoin market.
SEC Stance on Bitcoin ETFs
The SEC has thus far displayed reluctance in approving any Bitcoin ETFs, but the mounting number of applications in its queue is intensifying the pressure on the regulator to yield to market demand. In reality, the SEC has few valid reasons to persist in resisting these approvals. The cryptocurrency market, despite its lack of comprehensive regulation, offers a legitimate product in the form of Bitcoin ETFs.
As recently as two days ago, the SEC chose to defer a decision on the latest Bitcoin ETF application, by ARK & 21Shares, and continues to prolong the process.
However, due to the increasing influx of applications from reputable hedge funds, the SEC has shifted its stance from outright rejection, as it had done in the past, to employing various delaying tactics to slow down the approval process. Many observers now speculate that the SEC finds itself in a difficult position and may have little choice but to grant approval for the first US Bitcoin ETFs, possibly as early as next month.
Major Bitcoin ETFs Vying for Approval in 2023
As of today, the following spot Bitcoin ETFs are vying for the SEC approval:
ARK 21Shares Bitcoin ETF
This Bitcoin ETF is offered jointly by Florida-based ARK Investment and Swiss-based crypto investment firm 21Shares. 21Shares is one of the leading crypto funds in the market. By partnering with the US-based ARK Investment, the Swiss crypto firm hopes to find an easier route into the American ETF market.
The ETF is based on holding the Bitcoin cryptocurrency as its underlying asset. The ARK 21Shares Bitcoin ETF was first filed with the SEC in 2021. In March 2022, the SEC rejected the application, but the two companies behind the product continued their efforts to get it approved. On 26 September, the SEC delayed a decision on the re-filed ETF for another 60 days.
BlackRock iShares Bitcoin ETF
BlackRock is among the most influential investment funds to submit an application for a Bitcoin ETF. The company submitted its application to the SEC in mid-June. iShares Bitcoin ETF plans to invest mostly in Bitcoin, possibly with some part of the fund allocated to blockchain-focused equities. BlackRock has nominated the Coinbase crypto exchange as the custodian for the Bitcoin funds in the ETF.
On 31 August, the SEC postponed a decision on the iShares Bitcoin ETF until October. The deadline for a decision on BlackRock’s product is 17 October. While even this deadline might be further extended, anticipation is building up that the SEC will finally approve the Bitcoin ETF next month.
Other Funds in the “31 August Batch”
When the SEC announced its decision to postpone the approval of the iShares Bitcoin ETF on 31 August, BlackRock wasn’t the only firm to feature in the regulator’s statement. On that day, the SEC named several other investment managers whose Bitcoin ETF applications were delayed in bulk, all until October. The other firms in the “31 August batch” are Fidelity, Wisdom Tree Funds, Invesco, Valkyrie Funds, and Galaxy Digital.
All of these fund managers will hear about the SEC’s decision on their Bitcoin ETF applications next month. However, there is still a possibility that the regulator might further extend the deadlines. If the SEC continues to play the “let’s talk about it later” game in October, the final deadline by which it has to provide a definitive answer is January 2024.
How Likely is SEC Approval for Bitcoin ETFs?
The crypto investment world is eagerly awaiting the month of October. The SEC will have to provide some form of answer to the bidding investment funds. This might be an approval, rejection, or further delay for another couple of months to buy more time.
The good news is that the market is feeling fairly confident about the eventual approval of spot Bitcoin ETFs. Analysts at Bloomberg are estimating a 75% chance that the first US Bitcoin ETFs will get the SEC’s tick of approval by the end of this year, even if not in October. Fingers are kept crossed across the investment fund industry.