SEC decision on Bitcoin ETFs includes Wall Street giants.

SEC decision on Bitcoin ETFs includes Wall Street giants.

The SEC’s Delay in Bitcoin ETF Approval and Its Impact on the Blockchain Industry

The Securities and Exchange Commission (SEC) of the United States is facing mounting pressure to approve a spot Bitcoin (BTC) exchange-traded fund (ETF). The delay in reaching a decision has fueled expectations that a batch verdict will include key players on Wall Street, such as BlackRock and Fidelity. The approval of these ETFs is crucial, as the currently approved futures-backed products have been underperforming the spot market.

The SEC is currently analyzing eight applications for a spot Bitcoin ETF. These applications come from prominent companies like Ark and 21Shares, Bitwise, BlackRock, VanEck, WisdomTree, Invesco and Galaxy Digital, Fidelity, and Valkyrie. Combined, these firms manage over $15 trillion in global assets, highlighting the significance of the decision.

At present, the ARK 21Shares Bitcoin ETF application is undergoing a 21-day comment period. The SEC is seeking answers regarding the proposal’s ability to prevent fraudulent and manipulative acts in the Bitcoin market. Additionally, the regulator has raised concerns about Coinbase’s participation in the ETF’s surveillance and how it would contribute to detecting and deterring fraud and manipulation.

The potential approval of spot crypto ETFs raises concerns about market manipulation by large entities. The SEC fears that approving ETFs for one or two investment funds could lead to manipulative practices. However, if all eight ETFs were registered, the probability of manipulation would be significantly reduced. These firms would engage in frequent trading with each other, taking opposite sides and mitigating the risk of manipulation.

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The delay in the SEC’s decision has had a relatively low impact on Bitcoin’s price, which currently hovers around the $30,000-mark. Traders and investors were expecting the SEC to take their time in reaching a decision, minimizing the immediate market expectations. However, the final outcome of the Bitcoin ETF approval process could reshape the crypto investment landscape.

If approved, the Bitcoin ETFs could bring in over $70 billion in liquidity to the market. Regular investors would gain more confidence in investing in Bitcoin, as professional help and simplified access through ETFs would alleviate the need to delve into technical details and analyze potential risks themselves.

The SEC has two upcoming deadlines before a final decision is made. The ARK 21Shares application’s third deadline is due in January 2022, while Valkyrie’s application is the most recent and faces two upcoming deadlines in January and March 2023. The outcome of these decisions will have a significant impact on the blockchain industry.

In conclusion, the SEC’s delay in deciding on a spot Bitcoin ETF has sparked anticipation and speculation among market participants. The approval of these ETFs is crucial in ensuring that investors have access to regulated and reliable investment vehicles in the crypto market. The decision will not only impact Bitcoin’s price but also reshape the overall crypto investment landscape, attracting more liquidity and institutional participation. The blockchain industry eagerly awaits the SEC’s final verdict.