Big Money Management Firms Expect SEC to Greenlight Spot Bitcoin ETFs by January 10
Big money management firms expect the Securities and Exchange Commission (SEC) to grant approval for the first “spot” Bitcoin (BTC) exchange-traded fund (ETF) in early January.
According to sources close to these firms, recent guidance from SEC officials suggest a green light will likely come by January 10, Fox Business reported Thursday.
The SEC’s final deadline to approve or deny the application for a spot Bitcoin ETF is January 10, 2024, submitted by Ark Investment Management in collaboration with 21Shares.
Approximately a dozen companies, including renowned Wall Street asset managers like BlackRock and Fidelity, have applied for a spot Bitcoin ETF.
Executives at these firms believe that the SEC might approve multiple applications simultaneously.
The approval of a spot Bitcoin ETF would provide retail investors with increased exposure to the largest cryptocurrency at a lower cost compared to Bitcoin ETFs already approved and based on futures markets.
Furthermore, investors can gain access to Bitcoin through regulated money management firms, bypassing unregulated exchanges, as these ETFs would be traded on the New York Stock Exchange and Nasdaq.
In meetings with major money management firms, the SEC has insisted that applicants use cash to purchase shares of the ETF rather than the underlying asset, Bitcoin.
This marks a departure from the conventional “in-kind” transactions, where market makers can exchange Bitcoin for ETF shares.
Cash redemption creates a more complex process, as ETF issuers will have to exchange Bitcoin for cash in each transaction, thus buying the Bitcoin themselves instead of relying on broker-dealers.
Another drawback of cash creation is that investors would lose an important tax
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