In a recent development, insider sources linked to FOX Business suggest that the SEC is poised to greenlight the first spot Bitcoin exchange-traded fund (ETF) by Jan. 10, 2024. This potential decision looms as a transformative milestone for the widespread acceptance of cryptocurrency within the U.S.
Prominent financial institutions, including industry behemoths like BlackRock and Fidelity, have submitted roughly a dozen applications for spot Bitcoin ETFs, valuing the digital asset in real time.
Although the SEC has refrained from making an official statement, recent indications from regulatory authorities hint at a favorable outcome, possibly entailing the simultaneous approval of multiple applications.
If granted, this approval would afford retail investors an economical means to engage with the largest cryptocurrency globally. Significantly, it would empower investors to transact on regulated platforms such as the NYSE and Nasdaq, steering clear of unregulated exchanges.
Nuance
Nevertheless, a distinctive requirement from the SEC introduces a unique nuance to the approval process. The SEC is steadfast in its insistence that ETF applicants employ cash rather than Bitcoin to acquire shares, effectively eliminating the tax advantage associated with "in-kind" purchases.
This directive has prompted some applicants, Grayscale among them, to advocate for a hybrid approach, involving both in-kind and cash creations to foster a more efficient market structure.
The SEC's preference for cash transactions is attributed to restrictions imposed on broker-dealers, preventing them from directly engaging in spot Bitcoin trading. Speculation abounds that the SEC's apprehensions regarding potential misuse of Bitcoin, including activities such as money laundering and market manipulation, are the driving forces behind this restrictive measure.
Alex Dovbnya
Valeria Blokhina
