This week, the SEC is set to hold a crucial vote on applications for launching spot Bitcoin ETFs. Updated documents were required to be submitted by the morning of January 8 in Washington, according to Bloomberg.
Valkyrie, BlackRock, Grayscale, Bitwise, Hashdex, Invesco Galaxy, Fidelity, Franklin Templeton, VanEck, WisdomTree, and ARK Invest with 21Shares have met this condition.
On January 10, the SEC faces a deadline to deliver a verdict on the last proposal from the list. Most observers believe the agency will use this date to announce multiple decisions, as noted by the agency.
Approval of the instrument requires meeting two technical requirements. First, the Commission must register 19b-4 applications from exchanges that will list the ETF. Second, the regulator must approve S-1 forms, which are proposals from potential issuers.
Voting on the first point will take place in the coming days, according to Bloomberg. Around the same time, the agency may decide or abstain from decisions on the applications.
Trading of the ETF could begin as early as the next business day if both issues receive a positive verdict.
The high chances of product registration may be indicated by a warning from the SEC’s Office of Investor Education about the risks associated with digital assets.
#SECInvestingResolution 5: Say “NO GO to FOMO” (fear of missing out). Just because others might buy a particular investment, doesn’t mean it’s the right opportunity for you. Learn more about finding out what’s right for you and your investing goals: https://t.co/fixDWoNFrF pic.twitter.com/SGf1z6xmhL
— SEC Investor Ed (@SEC_Investor_Ed) January 6, 2024
“Say ‘No to FOMO’. Just because others might buy a particular asset doesn’t mean it’s the right opportunity for you,” the message states.
One of the first such notifications from the agency appeared on January 23, 2021, during a bull market. The Office issued a repeat warning in March 2022 when the market entered a correction.
A very interesting timing of this tweet. Could a possible approval of a #Bitcoin Spot ETF be prompting the SEC to provide warnings about FOMO on the Saturday before said approval? Hmmm… pic.twitter.com/UQR65nvUaP
— Michael Leonardi (@mleonardi247) January 6, 2024
Such SEC recommendations may indicate the regulator’s readiness to soon approve one or more spot Bitcoin ETFs, the community speculated.
According to Fox Business, BlackRock anticipates approval of their application to launch a spot Bitcoin ETF on January 10, although the final deadline for it expires five days after the specified date.
K33 Research reached a similar conclusion earlier. Analyst Vetle Lunde suggested that product approval could trigger a “sell the news” scenario. He noted that many short-term investors view a “green light” from the SEC as a signal to lock in profits.
Renowned Bitcoin critic Peter Schiff also sees risks of a correction following the announcement.
Be careful what you wish for. The promise of a U.S. listed spot #BitcoinETF has been supporting the #Bitcoin price and speculative demand for years. Once the ETFs are launched and the highly anticipated institutional and other new investor demand does not show up, look out below!
— Peter Schiff (@PeterSchiff) January 2, 2024
“[…] Those waiting for [current] news to sell the first cryptocurrency may find that there are very few speculators left to buy it. Once the ETFs are launched, the long-awaited institutional and other new investor demand will not immediately materialize,” he warned.
Proponents of digital gold are convinced of the opposite scenario.
“When a tsunami of buying meets a fixed supply, the price moves in only one direction,” commented Taproot Wizards CEO Dan Held.
Nansen CEO Alex Svanevik noted that “a rising tide lifts all boats.” He believes the capital inflow into Bitcoin ETFs will benefit the entire cryptocurrency ecosystem.
Bybit co-founder and CEO Ben Zhou predicted the emergence of “a new sense of confidence” as the effect of the instrument’s registration spreads across the market.
“Investors still seriously underestimate the potential impact of product approval,” stated Framework Ventures co-founder Michael Anderson.
Cinneamhain Ventures managing partner Adam Cochran shares a similar view.
“The biggest change is the legitimacy of Bitcoin ETFs for pension funds, RIA, mutual funds, and other conservative funds. For these [institutions], it will become legitimate to promote investments in digital gold-based instruments,” he explained.
ETF Store President Nate Geraci stated that product approval will create a bridge between DeFi and TradFi.
“For many investors, cryptocurrencies are an area that is too complex or risky to engage with. The ETF wrapper will serve as a link that helps them become more educated in the space and feel comfortable within it. In the long term, this should facilitate the overall adoption of digital assets as market participants eventually interact directly with the underlying technology,” he explained.
Better Markets, on the other hand, stated that approving spot cryptocurrency ETFs would be a “serious historical” mistake.
In an open letter to the agency, representatives of the nonprofit organization noted that product approval would lead to significant risks for investors. According to analysts, crypto firms could claim recognition of the asset by the U.S. government.
They added that there remains a small chance that the SEC will reject applications for such funds to gain additional time to develop legal norms for such products.
Analysts at CryptoQuant suggested that Bitcoin ETF approval could raise the asset’s price to $54,000. Morgan Creek Digital co-founder Anthony Pompliano warned that the instrument’s launch would not double the price of the first cryptocurrency overnight.
Conversely, JAN3 CEO Samson Mow predicted a rise in digital gold to $1 million within a few “days or weeks” following ETF approval.