A series of high-stakes deadlines this week will mark the culmination of a yearslong push to launch exchange-traded funds backed by bitcoin in the US.
Would-be bitcoin ETF issuers have been given until Monday morning in Washington to submit any last-minute revisions to their pending applications. The US Securities and Exchange Commission itself has until 10 January to take action on at least one of those applications, and crypto insiders have speculated the regulator will use that date to announce a slew of decisions at once.
There are two technical requirements that must be fulfilled before a spot-backed bitcoin ETF can start trading. First, the SEC must sign off on so-called 19b-4 filings by the exchanges that would list the ETFs. Second, the regulator must approve the relevant S-1 forms, which are the registration applications from the would-be issuers — a list that includes BlackRock and Fidelity.
The SEC is planning to vote on the exchanges’ filings, the 19b-4s, in the coming days. The regulator may or may not then take action on the issuers’ applications, the S-1s, around the same time. If the SEC grants both sets of required approvals, the ETFs could start trading as soon as the next business day.
A representative for the SEC declined to comment on the status of the applications.
Bitcoin’s boosters say ETFs backed by the largest crypto token would represent a watershed moment for the digital asset industry. Billions of dollars are at stake, representing potential inflows from retail and institutional investors alike.
“The market is still seriously underestimating the potential impact of a bitcoin ETF approval,” said Michael Anderson, co-founder of crypto venture firm Framework Ventures.
Investor protection
But the SEC under the Democrat Gary Gensler and his Trump-era predecessor Jay Clayton has previously refused to allow such a product to launch, citing concerns about investor protection and the potential for market manipulation.
However, speculation has been mounting since August, when the SEC lost a key legal fight against crypto asset manager Grayscale Investments, that the regulator will have to acquiesce to the growing clamour for the product.
Read: Bitcoin reverses course amid SEC jitters
Market wagers that regulatory approval is on the horizon fuelled a more than 160% jump in bitcoin last year. That still wasn’t enough to re-attain the record highs set in November 2021, when Bitcoin hit almost US$69 000. The token has stayed in a relatively tight range around $45 000 since the start of 2024. — Katie Greifeld and Allyson Versprille, with Hannah Miller, (c) 2024 Bloomberg LP