The race to launch a spot Bitcoin exchange-traded fund (ETF) in the US has recently heated up as Invesco and WisdomTree filed submissions with the Securities and Exchange Commission (SEC) for their own Bitcoin ETFs. WisdomTree, with $83 billion in assets under management, had its first application rejected by the SEC in December 2021 and a second one in October 2022, due to concerns of fraud and market manipulation. To address these concerns, the Cboe BZX Exchange has entered into a “surveillance-sharing” agreement with a spot Bitcoin platform.
Invesco, on the other hand, submitted its application for the Invesco Galaxy Bitcoin ETF hours after WisdomTree’s filing. In their filing, they argue that a spot Bitcoin ETF, which uses professional custodians and other service providers, would decrease the need for investors to rely on loosely regulated offshore vehicles, allowing them to more effectively protect their Bitcoin investments.
The recent moves by Invesco and WisdomTree follow closely behind BlackRock‘s unexpected submission for a spot Bitcoin ETF. Nonetheless, the SEC has so far only authorized Bitcoin ETFs tied to US-traded futures and has cited inadequate cross-exchange market surveillance as a reason for not approving a spot ETF. Invesco, however, counters that the US is an exception among major markets that do not offer spot exposure through traditional exchange-listed and traded products, unlike countries like Canada and Brazil.
The Bitcoin ETF filing by BlackRock has revived hopes for the Grayscale Bitcoin Trust (GBTC) to be converted into an ETF. This has led to GBTC shares soaring to over $16, the highest level since May 10th. Analysts suggest that this surge is motivated by investors who anticipate the ongoing Grayscale lawsuit against the SEC to end positively. With BlackRock’s submission, many believe Grayscale could emerge victoriously and have an ETF approved.
Grayscale initially submitted an application to convert GBTC into an ETF in 2016 and filed a petition to challenge the SEC’s decision after their June 2022 application was declined. If the SEC were to change its stance and approve these spot Bitcoin ETFs, it would signify a major shift in the regulatory environment and potentially boost investors’ confidence in the cryptocurrency market. However, security concerns and market manipulation issues must be adequately addressed before any significant progress can be made.
In conclusion, the recent ETF filings by Invesco, WisdomTree, and BlackRock showcase an increased interest and competition in the cryptocurrency market. Whether the SEC will finally approve the spot Bitcoin ETFs remains uncertain, but if it does, it would mark a significant milestone for the industry. While the regulatory environment continues to evolve, investors remain optimistic for the future of Bitcoin and the potential of spot ETFs.
Source: Cryptonews
