The potential approval of a spot Bitcoin exchange-traded fund (ETF) in the United States has been shrouded in suspense due to the Securities and Exchange Commission’s (SEC) ongoing delay in reaching a decision.
This delay is now raising speculations that the verdict might encompass influential players in the financial sector, including giants like BlackRock and Fidelity.
Dave Weisberger, co-founder of CoinRoutes and an experienced figure in the markets, emphasized the mounting pressure on the SEC to grant approval for several ETFs.
The performance of approved futures-backed products has fallen significantly behind the actual spot performance, adversely affecting investors.
He believes that the culmination of this decision will likely encompass all pending applications.
The SEC is currently evaluating eight applications for a spot Bitcoin ETF, reflecting a series of past rejections and postponements for such cryptocurrency-related products.
The contenders awaiting a decision comprise prominent entities like ARK Invest, Bitwise, BlackRock, VanEck, WisdomTree, Invesco, Galaxy Digital, Fidelity, and Valkyrie. Together, these firms oversee a staggering $15 trillion in global assets.
Recently, the SEC initiated a 21-day commentary period for the ARK 21Shares Bitcoin ETF.
The regulator’s inquiries revolve around the proposal’s potential to counter fraudulent and manipulative actions and its assessment of the susceptibility of the Bitcoin market to manipulation.
A particular focus was directed towards Coinbase’s surveillance-sharing agreement, with the SEC requesting input on whether this involvement could effectively identify, investigate, and discourage manipulation and fraud in Bitcoin’s valuation.
Ruslan Lienkha, Chief of Markets at YouHodler, offered insight into the SEC’s concerns about market manipulation by major entities.
He elaborated that if the SEC were to greenlight multiple ETFs, the risk of manipulation would substantially diminish, as these firms could engage in frequent trading against each other.
Despite the SEC’s extended contemplation, Bitcoin’s valuation experienced a modest impact, hovering around $30,000.
Market players, including Mauricio Di Bartolomeo, co-founder of Ledn, a crypto lending platform, seemed prepared for the SEC’s prolonged deliberation, asserting that today’s decision bears minimal influence on market expectations.
Notably, the SEC has a couple of deadlines to meet before reaching a final conclusion. The next deadline for the ARK 21Shares application is scheduled for January 2024.
Valkyrie’s application, the most recent addition to the lineup, faces deadlines in January and March of the following year.
The outcome of the BTC ETF ruling has the potential to reshape the landscape of cryptocurrency investments.
If approved, this could infuse the Bitcoin market with a substantial $70 billion in liquidity.
Lienkha highlighted the enhanced confidence regular investors would gain through ETFs, as professional guidance would alleviate the need for them to delve into intricate technicalities and risk assessments independently.
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