Bitcoin Spot ETFs Approval Nears as SEC Makes Final Tweaks

Key Insights:

• Bitcoin (BTC) price soared 6% on Monday to hit the $47,000 mark for the first time since April 2022, amid positive developments surrounding the Bitcoin spot ETF application process.
• The BTC price rally came as markets reacted positively to a statement issued by SEC Chairman Gary Gensler.
• While Gensler’s statement did not mention the proposed spot bitcoin ETFs, the timing of his post on X has raised eyebrows across crypto online communities.

Bitcoin’s (BTC) price soared above $47,000 for the first time in 21 months amid positive developments surrounding the BTC Spot ETF filings.

SEC Requests Minor Tweaks to Final ETF Filings

This week, Bitcoin exchange-traded fund (ETF) issuers sent the U.S. Securities and Exchange Commission (SEC) documents detailing their proposed management and trading fees. In effect the regulator has now reportedly responded with a request for minor adjustments.

According to reports, these ETF issuers, including BlackRock, Grayscale, and Fidelity, remain locked in active discussions with the SEC.

Late last week, key exchanges, including CBOE submitted amended 19b-4 filings with the regulator on behalf of prominent issuers, joining amended S-1 filings from last month that addressed feedback from the SEC.

The regulator has to give the green light to both the 19b-4 filings and the S-1 filings prior to the ETFs’ debut. Bitcoin ETF proponents believe such a regulated investment product could allow traditional financial institutions to gain exposure to BTC, without needing a wallet.

The SEC has rejected every spot Bitcoin ETF application so far, with the first one dating back to 2013. However, the regulator now faces a January 10, 2024 deadline for the ARK Invest (ARK) and 21Shares application for a spot Bitcoin ETF. Analysts believing the SEC will approve several Bitcoin ETFs at once on that date, bar any last-minute changes.

SEC Chair Gary Gensler Warns of Crypto Investment Pitfalls in Possible Approval Prelude

On Monday Jan 8, SEC Chairman Gary Gensler shared open advice for potential crypto investors, as the market awaits news on the approval of spot bitcoin ETF applications.

In a post on X, Gensler emphasized the potential risks associated with crypto investments, noting instances of major platforms and assets becoming insolvent or losing value.

Although Gensler did not specifically reference the proposed ETFs, the timing of his X post drew attention within the crypto community. This occurred shortly after major asset managers, including BlackRock, Ark Invest/21Shares, VanEck, WisdomTree, Invesco, Fidelity, and Valkyrie, filed amended S-1 forms for their proposed funds—a move perceived as a final step before potential approval.

The SEC is now reviewing amended 19b-4 forms filed by exchanges like Nasdaq, NYSE, and Cboe. If approved, trading can commence when the S-1 forms become “effective” in parallel. A decision is anticipated in the coming days, aligning with the Jan. 10 deadline for the SEC’s response to the first applications, such as Cathie Wood’s ARK Investment and 21Shares. However, analysts note the SEC’s authority to potentially delay the decision.

Markets reacted positively to Gensler’s recent comments, as expectant bullish spectators interpreted it as the SEC chair issuing guidance to potential traders who could enter the fray in after the imminent positive verdict.

Within 2 hours of the statement, Bitcoin Price soared 6% to hit a 21-month peak of $47,200