The long-awaited approval for a spot Bitcoin exchange-traded fund (ETF) may finally come this Wednesday. The world’s largest asset manager, BlackRock, is reportedly expecting its application to be approved, according to a report from Fox Business. Other contenders seeking to launch spot Bitcoin ETFs include Grayscale Investments, Valkyrie, ARK 21Shares, and Invesco. In addition, VanEck, WisdomTree, Pando Asset AG, and Franklin Templeton have also filed forms with the Cboe BZX exchange.
Anticipated Benefits of Spot Bitcoin ETFs
The approval of spot Bitcoin ETFs has been highly anticipated by cryptocurrency enthusiasts, who believe that these funds could attract billions of dollars in fresh investments into the cryptocurrency market. Holding actual bitcoin through exchange-traded products allows investors to participate in the market’s enthusiasm and potential growth, rather than solely speculating on its price through futures contracts.
Critics’ Concerns and Potential Regulatory Challenges
However, critics of cryptocurrencies have raised concerns about the volatility and lack of regulation in the bitcoin market. Non-partisan nonprofit Better Markets, which advocates for increased financial regulation, wrote a letter to the U.S. Securities and Exchange Commission (SEC) stating that approving spot Bitcoin ETFs would be “a regulatory mistake of historic proportions.”
On Wednesday, Bitcoin experienced a significant drop in price after a report claimed the SEC is poised to reject spot Bitcoin ETF applications this month. However, there have recently been rumors that approval could come in the near future. Senior TechCrunch crypto reporter Jacquelyn Melinek mentioned that approval could occur within 24 hours.
“Heard from sources extremely close to the matter that the bitcoin spot ETF is going to be approved by the SEC for *multiple* firms’ applications… expecting something tomorrow.” – Jacquelyn Melinek
Investment management firms, stock exchanges, and the SEC recently discussed final wording changes on filings for spot Bitcoin ETFs, a step that could lead to approval of the funds for the first time next week. Multiple issuers expect to receive final approval by late Tuesday or Wednesday.
The Battle for Investor Interest
With the SEC nearing the potential approval of the first Bitcoin ETF, issuers are vying for an early advantage to capture investor interest. Fidelity has set a highly competitive fee of 0.39%, while Invesco/Galaxy announced a fee waiver for the first six months of operation and for the first $5 billion in assets held, followed by a 0.59% fee. Analyst Eric Balchunas of Bloomberg has also predicted that BlackRock will likely set its fee at 0.47%.
