The financial market is eagerly awaiting the possible approval of an exchange-traded fund or ETF linked to the spot price of bitcoin. With this in mind, Fidelity, Ark Invest and Invesco have just updated their requests to the SEC. This in response to letters demanding clarification on the matter. The crypto community perceives this action as a positive sign that demonstrates an ongoing dialogue between companies and the regulatory authority.
Increase in Bitcoin ETF Requests Highlights Growing Interest in Crypto
In recent years, we have seen a strong enthusiasm for Bitcoin, which we consider to be an emblematic crypto. However, invest in BTC is often complex due to:
- price volatility,
- security risks,
- high fees,
- technicality.
This is where the idea of a spot Bitcoin ETF comes in. This type of crypto asset would allow investors buy and sell shares of a fund that actually holds bitcoin. This concept offers many advantages, including:
- the simplicity,
- liquidity,
- transparency,
- Security,
- regulatory compliance.
Approval of applications: The SEC examines 5 key elements
THE requests of Bitcoin ETFs amended by Fidelity, Ark Invest and Invesco highlight five key aspects that the SEC will carefully examine:
- The mechanisms linked to “hard forks» bitcoin
- Sources used to evaluate and price bitcoin, with emphasis on their compliance with accounting standards
- Disclosure of risks associated with regulatory uncertainty
- The environmental impact of bitcoin mining, an energy-intensive activity
- The risks of using bitcoin in illegal transactions
These factors provide a better understanding of what the SEC is really focused on. Also, they provide applicants with clear guidelines to address the crypto regulator’s concerns. Despite these encouraging developments, however, it is unlikely that new applications will be submitted before the first quarter of 2024.
The potential approval of a spot Bitcoin ETF is a hot topic in the financial market. With recent updates to the claims, pressure is mounting on SEC Chairman Gary Gensler for a long-awaited verdict. Although the outcome is uncertain, demand continues to grow. In reality, approval of a spot Bitcoin ETF no longer appears to be a question of “if,” but “when.”
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