The U.S. Securities and Exchange Commission, better known as the SEC, has once more stalled the approval of a spot Bitcoin exchange-traded fund (ETF), an application forwarded by Ark Invest. Extending the decision by two months, the agency called in for a public opinion on the Ark 21Shares Bitcoin ETF application, a conventional tactic by the organization to pave way for more time.
This move was anticipated, as noted by Ark Invest CEO Cathie Wood in her previous dialogue with Bloomberg, highlighting her expectation of a delayed decision by the SEC with a proposed approval of several spot Bitcoin ETF applications concurrently.
The SEC’s reluctance to endorse such applications is primarily due to the possible manipulation it brings about. Their concerns revolve around the assurance of safeguards for investors since a considerable collection of major spot cryptocurrency exchanges in the U.S remain largely unregulated.
In the wake of this, it’s worth mentioning that the Grayscale Bitcoin Trust (GBTC) are currently in a legal skirmish with the SEC over their constant rejections. Despite this, the new flood of applications from companies like BlackRock attempts to address these suspicions by featuring new market data and surveillance sharing agreements conducive to detection and eradication of possible manipulation, leading to a probable approval of these applications.
In this light, the likes of Galaxy Digital CEO Mike Novogratz and BlackRock are stated to be convinced of the inevitable approval of these applications. Novogratz went on record referring to his sources saying the matter now hinges on ‘when’ and not ‘if’ in relation to the approval of these applications.
Given this, an approval for spot Bitcoin ETFs if they see light in the U.S, it poses an opportunity for institutionally managed funds to enter the Bitcoin market. An influx of asset managers ready to assign a modest portion (say five percent) of their portfolio to Bitcoin but are hesitating owing to the absent official endorsement of a regulated spot ETF product, the approval for spot Bitcoin ETF applications could ignite a tidal wave of new demand for cryptocurrency.
In conclusion, an approval by the SEC could serve as a pivotal bullish narrative in 2024, coinciding with other major narratives like the imminent Bitcoin halving and the broader acceptance of crypto, possibly propelled by actions by the likes of PayPal in crafting their own stablecoin. Thus, while anticipation for a decision in September may seem unlikely, looking ahead to March 2024 presents a more plausible timeframe.
Source: Cryptonews
