BlackRock Inc., Ark, and several other groups aiming to issue exchange-traded funds directly tied to Bitcoin in the US updated their applications with the Securities and Exchange Commission on Monday. Alongside them, firms like Fidelity, Invesco, Galaxy Digital, and WisdomTree also made revisions to their S-1 applications.
The SEC has a deadline until January 10 to respond to at least one of these applications, with insiders speculating that multiple decisions might be announced at that time.
After the revised filings, Bitcoin bounced back from earlier losses, climbing up to 1.7% to reach $45,026 by 7:07 a.m. in New York.
There are two specific criteria that need to be met before a Bitcoin ETF backed by physical assets can enter the market. First, the SEC needs to approve the 19b-4 filings from the exchanges wanting to list these ETFs. Second, the regulator must give the green light to the S-1 forms, the registration applications submitted by the prospective issuers.
Reports from Bloomberg News suggest that the SEC plans to review the exchanges’ 19b-4 filings in the upcoming days. Following this, the regulator may or may not take action on the issuers’ S-1 applications around the same time. If both sets of approvals are granted, these ETFs could potentially begin trading as soon as the following business day.
An earlier inquiry to an SEC representative regarding the status of the applications was declined, offering no comment.
The potential introduction of Bitcoin-backed ETFs is seen as a landmark moment for digital assets, with billions of dollars hanging in the balance. Advocates believe this could attract substantial investments from both retail and institutional players.
Michael Anderson, co-founder of Framework Ventures, highlighted, “The market isn’t fully appreciating the game-changing potential of a Bitcoin ETF approval.”
Despite previous refusals to greenlight such products due to concerns about investor protection and market manipulation, there’s mounting speculation that the current SEC, under Gary Gensler and his predecessor Jay Clayton, might need to yield to the rising demand for these products, especially after a legal setback against Grayscale Investments in August.
Last year, the market witnessed a 160% surge in Bitcoin, driven by anticipation of regulatory approval, although it fell short of reclaiming the record highs set in November 2021 when Bitcoin almost hit $69,000.
