In a promising development for the crypto industry, the US Securities and Exchange Commission (SEC) has reportedly initiated talks with major cryptocurrency exchanges regarding the approval of spot Bitcoin exchange-traded funds (ETFs).
This engagement signifies a more open-minded approach from the SEC and raises hopes for a favorable decision in the near future.
SEC Offers Guidance on Amendments
Bloomberg ETF analyst Eric Balchunas revealed that the SEC’s Trading and Markets division has been providing guidance to exchanges regarding the necessary amendments for their spot Bitcoin ETF applications.
The SEC is specifically encouraging exchanges to adopt “cash creates” mechanisms, which involve using cash to purchase Bitcoin as the underlying assets for the ETFs.
Balchunas considers this approach a positive development as it would simplify the regulatory process for broker-dealers, who would otherwise face complexities in registering for direct Bitcoin dealings. This streamlined approach could potentially expedite the approval process and enhance the chances of success.
Growing Optimism and Deadlines
The SEC’s engagement with exchanges aligns with the increasing optimism within the crypto industry regarding the approval of spot Bitcoin ETFs. Both Balchunas and his colleague James Seyffart have recently raised the approval odds to 90%, citing various positive factors, including the SEC’s recent guidance on digital asset custody.
Based on this newfound optimism, industry experts anticipate the approval of spot Bitcoin ETFs by January 10, 2023. This projected timeline gains further credibility from the SEC’s recent actions and the overall positive sentiment surrounding the cryptocurrency industry.
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ETF Applicants Responding to SEC Feedback
In response to the SEC’s feedback, several ETF applicants, including prominent providers like WisdomTree, have already amended and resubmitted their applications. This proactive response from industry players demonstrates their eagerness to bring spot Bitcoin ETFs to the market.
similarly, Bitcoin investors have responded with enthusiasm to the SEC’s engagement with exchanges and the growing optimism for spot Bitcoin ETF approval. At the time of writing, the price of Bitcoin has surged by 1.48%, reflecting renewed confidence in the potential for spot Bitcoin ETFs.
Promising Steps Forward for Crypto ETF Regulation
The SEC’s recent discussions with cryptocurrency exchanges regarding spot Bitcoin ETFs mark a significant stride in the regulatory landscape for digital assets. Its willingness to engage with the industry and focus on practical solutions provides encouraging signs for the future of crypto ETFs.
With the odds of approval now at 90%, the crypto industry remains cautiously optimistic about the potential approval of spot Bitcoin ETFs by January 10, 2023. The approval of these ETFs would represent a significant milestone, paving the way for increased institutional investment and broader adoption of Bitcoin and other digital assets.