Blockchain

The crypto world buzzed with drama on Friday, fueled by an unverified rumor suggesting the SEC would greenlight Bitcoin ETFs. Instead, attention shifted to an 11-page letter from Better Markets, linked to Sen. Elizabeth Warren and SEC Chair Gary Gensler, cautioning against approving Bitcoin ETFs. Despite concerns, it’s doubtful this letter will derail the approval process, especially as it seems like a rehashed version of an older document.

The prevailing belief is that the SEC, after a court setback, will likely approve a group of filings on January 10, preventing any single Bitcoin ETF applicant from gaining an unfair advantage. However, uncertainties remain: which company will dominate the market—BlackRock, Grayscale, or others—and how an ETF approval will impact Bitcoin’s price.

Opinions diverge on this: the bear case suggests any price increase post-approval is already factored in, leading to a drop once the news is out. On the other hand, the bull case involves the concept of “model portfolios,” where major players like BlackRock may include Bitcoin, potentially boosting its value. Do you lean toward the bullish or bearish scenario for Bitcoin ETFs? Let’s discuss if you have a strong inclination either way.

As contenders for the spot Bitcoin ETF rush to submit their final paperwork to US regulators, a notable contrast emerges in their proposed fee structures.

At the higher end, the Grayscale Bitcoin Trust stands out, proposing a 1.5% fee should the US Securities and Exchange Commission greenlight its transformation into an exchange-traded fund. Although this fee is lower than GBTC’s current 2%, it remains notably higher than its competitors’.

In the fiercely competitive $8 trillion US ETF industry, fee competition plays a pivotal role. Even a marginal difference in basis points can translate into substantial inflows amounting to millions of dollars.

GBTC holds a significant edge in terms of existing assets, boasting a whopping $27 billion in assets since its inception in 2013. However, its rivals are proposing fees significantly lower than its proposed expense ratio.

Bitwise and Ark / 21Shares are attracting attention by offering an initial zero-fee period for the first six months or up to the first $1 billion in assets, after which fees rise to 0.24% and 0.25%, respectively.

VanEck’s HODL product suggests a charge of 25 basis points, while BlackRock plans to begin at 0.2% for the initial year or until it reaches $5 billion in assets, subsequently moving to a 0.3% fee.

Bloomberg Intelligence ETF analyst James Seyffart hailed this fee competition as highly beneficial for end investors, recognizing the potential advantage it offers.

Grayscale expressed confidence that GBTC would remain an exceptional offering for investors, citing liquidity, tight spreads, high trading volumes, and a decade-long track record of operational success.

Crypto insiders eagerly await Wednesday, a key deadline for the SEC to take action on pending spot Bitcoin ETF applications. This decision is highly anticipated within the cryptocurrency community.

Bitcoin saw a fleeting climb past $45,000 following amended filings by BlackRock Inc., Ark, and other potential ETF issuers, viewed by analysts as a final push to introduce these investment products.

The original cryptocurrency briefly surged by 2.1% to $45,207 before pulling back. Last year, Bitcoin soared nearly 160%, largely fueled by hopes of US SEC approval for these applications, reaching a 2024 peak of $45,911 on January 2nd.

Alongside BlackRock and Ark, firms like Fidelity, Invesco, Galaxy Digital, and WisdomTree also updated their S-1 applications with the SEC. With the regulator’s deadline set for January 10, speculation among crypto insiders suggests a possible cluster of decisions being announced on that date.