In a significant development, talks between U.S. regulators and major asset managers regarding Bitcoin Spot ETF have progressed to crucial technical details. This signals a potential shift in the Securities and Exchange Commission’s (SEC) stance toward approving exchange-traded funds (ETFs) tracking the BTC price.
Meanwhile, 13 firms including Grayscale, BlackRock, Invesco, and ARK Investments, with pending applications, are at the forefront of these discussions.
Bitcoin Spot ETF Discussions Progress As SEC Engages In Advanced Talks
The SEC, historically cautious about approving cryptocurrency-related products, is now delving into intricate aspects like custody arrangements, creation and redemption mechanisms, and investor risk disclosures, Reuters reported citing industry executives. Meanwhile, this shift follows a court ruling stating the SEC’s error in rejecting Grayscale’s ETF application, prompting the SEC to engage more substantively with ETF issuers.
Investors eyeing regulated avenues to invest in Bitcoin see ETFs as an optimal solution. A Bitcoin Spot ETF approval would open the gates for wary investors to access the cryptocurrency through the tightly regulated stock market, with an anticipated demand of up to $3 billion in the initial days.
Meanwhile, executives from major firms, including BlackRock, Grayscale, Invesco, and 21 Shares, working with ARK, have been meeting with SEC staff since September. According to the report, recent discussions, previously focused on Bitcoin’s susceptibility to manipulation, now encompass nuanced technicalities.
In addition, memos reveal an acceleration in the SEC’s information requests and meetings even at the office of SEC Chair Gary Gensler. Notably, the recent bullish trend in Bitcoin prices aligns with the positive trajectory of these discussions.
Meanwhile, the SEC must make a conclusive decision on ARK’s filing by January 10, given its priority status. According to the industry executives, the in-depth nature of these discussions suggests a potential approval of ARK’s application and possibly several others among the remaining 12 in the coming New Year.
Also Read: India May Have Its Crypto Or Web3 Bill By 2025
Challenges And Future Prospects
While optimism surrounds these developments, the SEC remains tight-lipped about potential approvals. Key concerns, such as the settlement mechanism of whether cash or “in-kind”, still pose challenges. In addition, SEC Chair Gary Gensler, a crypto skeptic, has not provided a timeline for decision-making but acknowledged the agency’s consideration of Bitcoin ETF filings.
However, some see the Grayscale ruling as limiting grounds for rejections, adding to the momentum. Notably, issuers, confident in addressing market manipulation concerns through surveillance arrangements with exchanges like Coinbase, await a potential breakthrough.
Meanwhile, the evolving dynamics between the SEC and ETF issuers suggest a paradigm shift in the regulatory landscape, opening new avenues for investors to engage with Bitcoin.
Also Read: JPMorgan Could Launch A Bitcoin ETF, Says ETF Expert Nate Geraci
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