US SEC is expected to greenlight the first spot Bitcoin ETF this week, opening the door for a possible $10 billion inflow in 2024.
People in the Bitcoin community are waiting with bated breath for the United States Securities and Exchange Commission’s (SEC) greenlight on spot BTC exchange-traded funds (ETFs). Starting this week, the SEC should begin to take action on these applications, accepting or denying proposals from applicants.
The SEC has until Wednesday to decide on the ETF application from 21Shares and Cathie Wood’s ARK Invest, the first proposal submitted last year. The Commission may also decide on other applications on the date, or delay their decision until the stated deadline for each of the other proposals.
SEC Greenlight Likely as Agency Deliberates on Proposals
According to reports, applicants had until Monday morning in Washington to make any last-minute submissions. Reports also suggest that the SEC may publicize some of these changes on that day. The crypto community is now waiting for word from the SEC, with many observers and analysts predicting a high chance of a green light.
There have been several deliberations between the SEC and a few applicants, with some making changes to their proposals. In some cases, applicants had to amend their filings to disclose market-makers. In other cases, the SEC preferred for applications to directly specify any included fees.
A Reuters report states that the SEC asked a few applicants to ready written requests for the effective dates of these ETFs. This lends credence to the optimism around approval because the SEC’s ask is unusual. Typically, the Commission would engage the prospective issuers more informally.
The SEC has never approved a spot Bitcoin ETF application since the Winklevoss Twins’ Gemini exchange applied for the first one in 2013. Since then, the agency has rejected all applications, citing several problems with fraud and market manipulation. The existing applications before the SEC have addressed the agency’s concerns, with some of them introducing a surveillance-sharing agreement (SSA). The SSA requires information sharing and coordination to significantly reduce the chance of market manipulation and fraud in the ETF market.
The SEC’s greenlight for spot Bitcoin ETFs involves two requirements. The agency must first approve the 19b-4 filings submitted by exchanges seeking approval for proposed rule changes. The other is the approval of S-1 forms, which are registration applications for the public sale of these products.
Impact of SEC ETF Greenlight on the Bitcoin Market
The predictions surrounding a likely ETF green light from the SEC are considerably bullish. Amid the general optimism, Bitcoin jumped 7% to $45,806 on the first day of 2024, landing at a 21-month high. Although the king coin has corrected back to $44,000 as of press time, the market sentiment is still quite bullish.
Analysts Mahika Sapra and Gautam Chhugani at AllianceBernstein said 2024 would be a “breakout inflection year for crypto.” The analysts bullishly predict that Bitcoin will scale its current $69,000 all-time high from 2021 and could potentially end the year around $80,000. They also said that while Bitcoin ETF inflows would initially be gradual, applicants would try to get ahead of each other by “tuning up advertising and Bitcoin branding leading to a snowball effect.”
The analysts expect $5 billion to enter the Bitcoin market in H1 2024, and $10 billion by H2. Also, they said that about 10% of Bitcoin would be in the ETF market by 2028.
