Bitcoin ETF holds a significant importance in the crypto market. This is evident from the fact that Bitcoin is inching closer to its next resistance mark of $45k under the speculation that the US Securities & Exchange Commission will approve all the applications maximum by January 10, 2024. As a matter of fact, it is driving the entire market with an upward trajectory.
It is important to note that the approval of Spot Bitcoin ETF applications is still under consideration by the Commission. This brings a question of whether Bitcoin ETF is actually a real thing or if the community is just hyping the concept to boost the trading valuation of digital tokens.
What is Bitcoin ETF?
A Bitcoin ETF, an acronym for Exchange Traded Fund, is a fund that enables traders to track the value of Bitcoin without holding it in their wallets. The product is listed on traditional stock exchanges instead of crypto exchange platforms and yields returns based on how high the price has moved in a certain time.
The number of potential that Bitcoin ETF brings to the table include:
- Fund security for investors
- Higher investments
- A formal structure for trading
The Bitcoin ETF is poised to attract large numbers since it will officially structure how investments must be made. The Commission seeks to ensure that funds are safe by eliminating the direct trade in BTC.
However, some challenges must be considered before giving a green signal to the product. This includes regulating the movement of funds and educating investors about the product. Both carry a scope wherein funds can be lost in seconds, especially the latter aspect. Lack of education about how to trade Bitcoin ETF and when to inject or withdraw funds can lead them to lose a portion of their portfolio.
Nevertheless, merely the talk of Bitcoin ETF has sparked the interest of traders from across the world. All of them have their eyes set on the first half of January next year when the SEC could potentially approve applications.
Historical Context and Past Proposals
It started with Grayscale taking a stand to develop Grayscale Bitcoin Trust. The Commission moved an argument that it does not align with their policies. Thereby putting customers at the risk of losing legal protection and their funds.
What followed was a track of reputed ventures coming up to file their applications. Till now, BlackRock, Bitwise, and Franklin are some of the market leaders who have submitted their proposals to authorities. BlackRock and Bitwise have even revised their proposals in a way that meets requirements set by the SEC.
They are yet to be approved, standing on the edge of where they face the challenge of getting rejected. Possibility in this sense comes under light because relevant authorities have clarified that they cannot allow direct exposure to Bitcoin, for it links trading by investors directly to market volatility. Revised proposals seek to have creations in kind and cash for better service.
Ongoing Regulatory Discussions
It has been reported that Franklin received a notice stating that the SEC had delayed the application 30 days before the original deadline. While it should have instilled a sense of anxiousness, the community is now more than confident that the application could be soon approved.
Experts have underlined that authorities have caused a delay only to not give the first mover’s advantage to any particular firm. Meaning they are looking to approve all applications together.
- Communication between BlackRock and the SEC has urged BlackRock to revise and submit the application to them along with Nasdaq. The firm has done its best to balance the preferences of the Commission and now waits for further feedback.
- Bitwise is on the list, too, with similar revisions made to its proposal. The asset management firm revised the S-1 filing to signal that many more asset managers may have received a similar communication.
All the applications are with the SEC and are waiting to be approved. Speculation states that the set may get a green light by January 10, 2024, if not on January 08, 2024.
Market Impact and Speculation
The impact of Bitcoin ETF speculation can be measured by how two major cryptos have behaved in recent days.
- Bitcoin has climbed by 25.87% in the last 30 days, touching the valuation of $43,940.09 while articulating this piece. Our BTC forecast estimates that it could surpass the milestone of $65k next year at this pace.
- Ethereum has seen a jump of 19.78% during the same period. ETH is exchanging hands at $2,271.40 while the draft is being worked upon.
The overall market impact is that the industry may inch closer to the Market Cap of $1.955 trillion when the bull run escalates.
As of now, it is safe to assume that the Bitcoin ETF is a real thing under production. Asset management platforms are constantly in touch with the SEC to improve their proposals without compromising the trading experience. If reports are to be believed, then applications would be approved in the first half of January 2024.