Bitcoin ETF Countdown To Approval – Brace For The Revolution

If you got into crypto recently, you are surely familiar with the ETF Bitcoin and the struggle to get it approved over the years in the United States. It is currently occupying all news feeds, and every single crypto trader and investor is eagerly awaiting the outcome of the process. All eyes are on the US Securities and Exchange Commission (SEC), which is supposed to give the final green light and approve the Bitcoin ETF.

It probably sounds like a long-running, nail-biting saga, so allow us to explain as concisely as possible what the Bitcoin ETF is, who is pushing for its approval, what it could bring to the crypto world and markets as a whole, and how it could shape the future of the industry.

What Is Bitcoin ETF?

Before breaking down the excitement and hype about the Bitcoin ETF news, we must first briefly explain what ETFs are, how they affect BTC, and why there is a need for a spot ETF. Our goal is to make sure you understand the basic concept without going too deep into the perplexing market layers.

Look no further than the US Commodity Futures Trading Commission (CFTC) website. According to the American regulator, ETFs (exchange-traded funds) are investment companies regulated by the SEC. The shares they issue must be registered with the SEC. Similar to mutual funds, ETFs outline investment objectives and employ professional money managers to achieve those goals.

Keep in mind that the article discusses futures ETFs, which were approved back in 2021, whereas we are focused on the Bitcoin spot ETF since the whole affair is about the latter. Futures contracts are derivative agreements to purchase or sell a particular commodity, asset, or security at a predetermined future date for an agreed-upon price. As you can imagine, such contracts carry immense risks.

Spot contracts, on the other hand, equal the purchase at the immediate price. The desired outcome of the whole Bitcoin ETF approval process is to get a spot exchange-traded fund to avoid the risks associated with leverage trading and minimize volatility. This means the price of the ETF is in line with the actual BTC price rather than the potential price in the future.

Is SEC Approval Finally Coming Along?

The SEC is in discussions with investment management firms and exchanges regarding final wording changes for spot Bitcoin ETF filings. Sources suggest that the approval of these funds in the US is imminent, with issuers expecting final approval of S-1 filings by January 9th.

The SEC has requested minor changes, such as disclosing fees or market-maker identities, and issuers are anticipated to amend filings accordingly. Regulatory approval for spot bitcoin ETFs is expected on January 10, with the SEC potentially voting on rule changes the following week. History shows that delay or rejection is also possible but those closely monitoring the procedure are certain that this time, it will be an approval.

Who Are the Main Players?

Several major players, i.e. investment companies, have been named as authorized participants for various Bitcoin ETFs:

• BlackRock Bitcoin ETF Trust;
• VanEck;
• Franklin Templeton;
• Fidelity Wise Origin Bitcoin Trust;
• Valkyrie Bitcoin Fund;
• WisdomTree Bitcoin Fund;
• Invesco Galaxy Bitcoin Fund;
• Bitwise Bitcoin ETF;
• Grayscale Bitcoin Trust;
• ARK 21Shares Bitcoin ETF.

These authorized participants play a crucial role in providing liquidity to the Bitcoin ETF market. As you can see, the list is no joke; it features BlackRock, the largest investment firm in the world, which controls a staggering 9 trillion dollars in assets under management.

Yet, the key player here is actually Grayscale. The company holds 27 billion dollars of BTC and is positioned as a dominant factor in the potential approval of Bitcoin ETFs. Grayscale’s significant assets under management and daily volume, along with its established investor base, give it a competitive advantage over other issuers seeking approval.

Among the list, Bitwise is first with a fee of 0.24%, followed closely by Ark, VanEck, and 21Shares at 0.25%. BlackRock has set its fee at 0.30%, lower than anticipated. The Grayscale Bitcoin ETF holds the highest fee at 1.5% but with a clause for fee waivers and a substantial 28 billion dollars in assets. The competitive fee landscape is expected to benefit investors and influence cryptocurrency exchange fees.

Despite concerns about Grayscale’s higher proposed fees, the firm’s undeniable market presence and liquidity, coupled with tax considerations, could make it challenging for competitors like BlackRock and Fidelity in the growing ETF landscape.

Bitcoin ETFs Outside the US

In 2022, the Australian Stock Exchange (ASX) saw the introduction of new crypto ETFs. Bitcoin ETF Australia made its debut on the ASX in April 2022, offering Australians the chance to invest in a crypto exchange-traded product.

However, during the same year, three of these ETFs were delisted. The approval process for these listings coincided with a challenging period for the crypto industry, plagued by declining prices and the controversial collapse of the FTX exchange. The ASX is expected to approve a BTC ETF in the first half of this year, coinciding with expectations of US regulators approving the first spot cryptocurrency ETFs on January 10.

Such action could pave the way for the first-ever Bitcoin ETF UK, prompting the FCA to give its stamp of approval as well. Crypto funds are also active in Canada, Europe, and Brazil. It’s great news for crypto investors all around the world.

What Does the ETF Bring to the Market?

The approval of a spot Bitcoin ETF in the US would represent a breakthrough for the market. For 10 years, the SEC has raised concerns about market manipulation, leading to rejections. The ETF introduction could represent an unprecedented opportunity for crypto investors and open the gates to a whopping 50 trillion dollar market for financial advisors, retail investors, and private banks, thus boosting institutional investor confidence.

VanEck’s Gabor Gurbacs believes a spot ETF will create long-term value. It is also crucial to note that the approval may lead to a supply shortage.

Conclusion – Future of Crypto

The crypto community eagerly anticipates the SEC’s decision on spot Bitcoin ETF on January 10, coinciding with a demand surge and the April 2024 halving. The market has experienced a 61% rally amid heightened expectations of the approval, leading some to predict a sell-the-news pullback once approved and later corrections before April.

Historical comparisons to events like the CME Bitcoin futures debut suggest a potential post-approval decline. Nevertheless, bullish sentiments signalize billions of dollars flowing into BTC, triggering a marketing war between asset managers and large investors to convey the coin’s narrative to financial managers, potentially fueling long-term bullish trends, as Gurbacs said.

All in all, it is a milestone for crypto as a whole and an unquestionable testament to its establishment in the world of finance and market trading.