According to Fox Business: The U.S. Securities and Exchange Commission (SEC) is poised to make crypto history by issuing its first-ever "spot" Bitcoin exchange-traded fund (ETF) approval. Major financial firms are increasingly optimistic, speculating that the regulatory green light may come around January 10, 2024. This speculation has been spurred by recent guidance from SEC officials.
The first firm in line, awaiting approval for their spot Bitcoin ETF, is Ark Investment Management, in partnership with 21Shares. Several other influential Wall Street asset management firms, including BlackRock and Fidelity, are among the dozen companies that have applied for this type of ETF.
Insiders believe that the SEC may greenlight several applications simultaneously. If this speculation becomes a reality, the mainstream adoption of cryptocurrency in the U.S could see a significant boost.
A spot Bitcoin ETF would provide retail investors with greater exposure to the world's leading cryptocurrency in a cost-effective manner, compared to existing Bitcoin ETFs that are priced off the futures market.
However, one potential downside is the SEC's insistence that purchases of such ETF shares be made in cash, not using the underlying asset (Bitcoin). This stipulation would mean a departure from the standard "in-kind" transactions associated with conventional ETFs. Critics argue that "cash create" transactions complicate the process and could undermine some tax advantages.
The global money management giant, BlackRock, has held five meetings with the SEC regarding its spot Bitcoin ETF application. Other ETF hopefuls have held around 24 meetings with SEC staffers, signaling the agency's intent to bring these ETFs to market in the coming year.
While there's the possibility that the SEC could decline all applications, such a scenario is considered improbable by industry experts. This belief has been reinforced by a court ruling in August in favor of crypto asset manager Grayscale, allowing them to convert their GBTC Trust into a spot Bitcoin ETF.