Whether Bitcoin ETF can be approved has always attracted much attention from the market. According to a report by Matrixport, the price of Bitcoin plummeted by 9% in just one hour, and they predicted that the SEC will reject all Bitcoin ETF applications. Matrixport believes that the reasons why Bitcoin spot ETF may not be approved are as follows:
1. 1.5 of the voting members are Democrats, which may have a certain impact on the approval of Bitcoin ETF.
2. Democrats generally dislike "cryptocurrency", which may also become an obstacle.
3. The applicant has failed to meet the SEC's requirements and may have non-compliance with regulations.
4. Matrixport believes that there may be a lack of obvious political reasons for approving a Bitcoin ETF.
However, in a full interview with Bloomberg, a Bitcoin ETF is more likely to be approved than previous attempts for the following reasons:
1. Grayscale won the court case against the SEC. This judgment significantly changed the situation and became the main catalyst for ETF approval.
2. The SEC has strengthened its engagement with ETF issuers. Active discussions and meetings show that both parties are more collaborative and open and committed to addressing ETF-related issues and concerns.
3. Issuers gradually addressed the SEC’s concerns and checked many of the SEC’s approval requirement checklists, such as being limited to “cash redemption.”
4. The Bitcoin market has matured over the years, with better infrastructure, more institutional participation and a stronger regulatory framework.
5. Advances in market surveillance and compliance mechanisms make it easier to address the SEC’s concerns about market manipulation and fraud.
6. The growing interest of established financial institutions in Bitcoin may have played a positive role in promoting regulatory transparency and ETF approval.
The approval of a Bitcoin ETF may not be rejected as Matrixport predicts, or it may be exaggerated.
Regarding the situation on October 27, the seed investor paid $100,000 and received the initial fund shares, but is expected to cash out again on January 5. At the same time, the creation basket of the planned purchase of an expanded ETF worth $10 million is also in the modification request. This means that BlackRock is returning the $100,000 previously paid to the seed investor on October 27 through cash redemption, and applying for a larger $10 million seed fund subscription from the same investor.
In explaining this, the sentence uses the past tense despite referring to a future date. BlackRock is currently returning the $100,000 previously paid to the October 27 seed investors through a cash redemption and requesting a larger $10 million seed fund subscription from the same investors.
If they think BlackRock might deny ETF approval, they should try to make this amendment to the seed investors by amending the S-1 update to redeem the $100,000 fund issued on October 27 in cash. Since the seed investors’ setup at the fund launch is critical to BlackRock, BlackRock will fully communicate with investors.
Typically, seed investors participate in seed investments and hold individual/retail end investors. In other words, the seed investors may well have conducted a test group retail demand survey and submitted it to BlackRock, which then determined the seed size. In this case, if BlackRock believes that the likelihood of the ETF being approved in the near term is low, they may not forcefully attempt to amend the S-1.
However, like everything, approval is not 100% guaranteed for the following reasons:
Because the S-1 is still under amendment, the dates in brackets may be pushed back.
Political and external factors may always intervene.
Nevertheless, there is considerable evidence that approval of a Bitcoin ETF is urgent.
PS: As the release date approaches, the BTC price may increase, so be careful when trading during this period. As for other tokens, you may need to take profit around the 7th or 8th to preserve your funds, and it is not too late to re-enter after the news stabilizes.
