Asset managers including Fidelity, BlackRock, and VanEck submitted updated filings for spot Bitcoin exchange-traded funds (ETFs) to the SEC last week ahead of a key deadline that could see decisions on the proposals by early January. The flurry of activity signals growing confidence that 2024 may finally be the year a spot Bitcoin ETF gets approved in the U.S.
Race to Launch First Spot Bitcoin ETF Intensifies
For years, companies have sought permission from the SEC to launch Bitcoin ETFs that invest directly in the cryptocurrency rather than Bitcoin futures contracts. However, the SEC has consistently rejected or delayed ruling on these spot Bitcoin ETF applications over concerns about manipulation and volatility in crypto markets.
That may about to change, with major players making a final push to convince regulators ahead of an expected decision:
| Company | Details |
|---|---|
| Fidelity | Set proposed fee at 0.39% to undercut competitors |
| Invesco | Working with physical crypto asset manager Osprey Funds |
| BlackRock | World’s largest asset manager, over $10 trillion AUM |
| Galaxy Digital | Filed updated prospectus last week |
Sources say SEC decisions could come as soon as January 3 on some of these applications, setting off a race between these heavy hitters to become to first SEC-approved spot Bitcoin ETF.
Why a Spot Bitcoin ETF Matters
Allowing a spot Bitcoin ETF in the U.S. would be a watershed moment, greatly accelerating institutional adoption and unleashing a flood of new money into the cryptocurrency from mutual funds, hedge funds, and ordinary investors.
It would give Wall Street easy and safe access to Bitcoin in a regulated structure they are comfortable with, without needing to directly handle cryptocurrency keys and addresses. This could broaden Bitcoin’s appeal and amplify existing momentum in the industry.
“A spot bitcoin ETF would pull $30 trillion into bitcoin, ether, solana, XRP, cardano, shiba inu and other cryptos,” said Amy Wu, head of FTX Ventures.
Cboe Digital President Bryan Harkins agrees the impact will be substantial, expecting Bitcoin spot ETFs to attract major institutional players:
“We think you’re going to see a lot of uptake in those products from pension plans, you’re going to see uptake in those products from RIAs and independent broker-dealers.”
What’s Next if SEC Approves Bitcoin Spot ETF
Most analysts agree that SEC approval of a spot Bitcoin ETF would drive prices higher in the short term, likely testing previous all-time highs around $69,000. However, some warn that longer term, it may “sell the news” if it causes speculators to take profits. Others believe continued crypto adoption could sustain or even accelerate gains.
On the regulatory side, attention would turn to whether the SEC might also approve spot ETFs for other cryptocurrencies like Ethereum. Some legal observers think a win on Bitcoin could force the SEC to also permit other compliant applications.
For now, all eyes are on the SEC in early 2024 to see if this is finally the year Bitcoin ETF dreams become reality. Approval seems more likely than ever before based on comments from figures like SEC Commissioner Hester Peirce:
“I thought that we would have approved one by now, so I do hope that 2024 is the year.”
With massive amounts of institutional money waiting on the sidelines, the crypto space should prepare for choppy but epic price action if the floodgates finally open.
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