Approval This Week? Bitcoin ETF Approval Speculation Reaches Fever Pitch

The anticipation for a potential approval by the Securities and Exchange Commission of a spot Bitcoin ETF has put the crypto market into a frenzy.

Anticipation Rises as a New Year Dawns

The buzz around the potential approval of a spot Bitcoin ETF by the SEC has created an intense atmosphere within the cryptocurrency market. Anticipation had already been rising for weeks after a leak exposed confidential discussions between SEC officials and over 13 asset managers, including names like BlackRock.

Reuters reported in late December that two executives had disclosed that “a first wave of potential spot bitcoin ETF approvals” could be expected in early January. According to these reports, this was said by SEC officials during a meeting in which attendees were informed they had until December 29 to update their fillings.

Grayscale’s Chief Legal Officer Craig Salm further kindled rumors by tweeting “Just filling out some Forms” on January 4th. This came two days after Grayscale’s CEO Michael Sonnenshein’s tweet stating “big work week”. Both Salm and Sonnenshein have been posting cryptic tweets that have been interpreted as indications of an imminent approval by the SEC.

Bloomberg analyst James Scyffart, however, had referred to the rumors as “noise”, stating that if approval was to happen, it would be between January 8th and 10th. Scyffart had said days before that while he expected such signaling by the SEC, however, even if the signaling didn’t occur, a gap between the approvals and trading would need to be taken into consideration.

Financial Giants Fight It Out

The race for approval for a Spot Bitcoin ETF has been going on for months already and involves 14 issuers, including major players like BlackRock, Valkyrie, ARK Invest/21 Shares, Bitwise, and Fidelity. Reports indicate that all of these companies have already developed the necessary infrastructure to run these ETFs once approved, looking to have the early advantage.

According to Fortune, Fidelity has already set a 0.39% fee for its Bitcoin ETF in anticipation of the approval. The same has been the case for Galaxy/Invesco, which plans to waive fees for the first six months and an initial $5 billion, later transitioning to a 0.59% fee.

Players like Fidelity, Galaxy/Invesco, WisdomTree, Valkyrie, and BlackRock also took advantage of the December 29th deadline. The firms updated their applications to list the first authorized participants they will be collaborating with. These include names like Jane Street Capital, KP Morgan, Virtu, and Cantor Fitzgerald, all major players in the industry.

Bitcoin’s Future is Anything but Certain

The crypto world is looking at the approval of a Bitcoin ETF with anticipation as such an event would be a major milestone for the whole ecosystem. Bitcoin remains the biggest cryptocurrency by market capitalization as well as activity, which has made it an indicator of the whole market’s health. If Bitcoin ETFs were to be approved by the SEC, it would be an indication that Bitcoin is a trustworthy investment vehicle.

By gaining institutional support, Bitcoin could see trillions of dollars being created in the long term while also reaching a new audience of traditional investors. However, experts still disagree on what the consequences would be in terms of supply and demand dynamics.

According to Coindesk, many experts believe that a “supply shock” could take place depending on the SEC’s requirements in terms of initial investment. Analysts like JAN 3 CEO Samson Mow have gone as far as predicting a rally that would take Bitcoin to $1 million.