The US Securities and Exchange Commission (SEC) is expected to vote on the Bitcoin spot ETF application this week, which also means that this long-awaited "big day" in the cryptocurrency industry is about to officially come.
According to media reports, companies interested in issuing Bitcoin spot ETFs have been required to submit the final modifications to their application to Washington before Monday morning. The US Securities and Exchange Commission itself will make a final decision on at least one of these applications before January 10th. Industry insiders in the cryptocurrency industry speculate that regulatory agencies may also take advantage of this day to announce a series of decisions.
Before starting trading Bitcoin ETFs supported by spot trading, two regulatory approval processes must be met. Firstly, the US Securities and Exchange Commission must sign the so-called 19b-4 documents submitted by ETF listed exchanges, which are proposals for exchange rule changes to allow ETFs to trade on stock exchanges.
In addition, regulatory authorities must approve the relevant S-1 form, which is the prospectus document of potential issuers. Currently, issuers applying for the listing of Bitcoin spot ETFs include several large institutions such as BlackRock and Fidelity.
The New York Stock Exchange and Nasdaq submitted revised 19b-4 documents to the SEC last Friday, and the SEC plans to vote on the 19b-4 documents submitted by the exchange in the coming days.
Regulatory authorities may, but may not, take action on the issuer's S-1 form application at the same time. Generally speaking, S-1 files will be batch after 19b-4. If the SEC approves both sets of necessary documents, Bitcoin cash ETFs can start trading as soon as the next business day after approval.
According to people familiar with the application process, issuers who meet the year-end application revision deadline may be allowed to launch Bitcoin ETFs before January 10th - the US Securities and Exchange Commission must decide on this day whether to approve or reject the listing of Ark/21 Shares ETFs, which are the top ranked funds in terms of application approval.
Over the weekend, a representative from the SEC refused to comment on the status of these applications. But multiple publishers announced last Friday that they expect to receive final approval for the S-1 file later on Tuesday or Wednesday.
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Since 2013, several asset management companies have applied to launch spot Bitcoin ETFs, but they have all been rejected by the US Securities and Exchange Commission due to concerns that these products may be easily manipulated by the market and that investor interests may not be protected.
However, since the SEC lost a key legal lawsuit against cryptocurrency asset management company Grayscale Investments in August last year, the market has speculated that regulatory agencies will have to acquiesce to the launch of such products. Currently, 14 companies, including BlackRock, Fidelity, and WisdomTree, submitted applications for spot Bitcoin ETFs last year and are awaiting a decision from the SEC.
Supporters of Bitcoin say that once this largest cryptocurrency backed ETF is successfully approved for listing, it is expected to represent a groundbreaking watershed for the industry. This will involve billions of dollars in benefits and attract a large potential inflow of funds from retail and institutional investors.
Michael Anderson, co-founder of Framework Ventures, a cryptocurrency venture capital firm, pointed out that "the market still seriously underestimates the potential impact of Bitcoin ETF approval."
The betting in the cryptocurrency industry that regulatory authorities will soon approve the listing of Bitcoin spot ETFs has driven Bitcoin to soar by over 160% last year. But this is still not enough to bring Bitcoin back to its historical high set in November 2021, when it reached nearly $69000. Since the New Year, Bitcoin has been fluctuating around $45000.