Bernstein: SEC poised to grant approval for Bitcoin ETF listing

**Probability of SEC Approving Spot Bitcoin ETF in Near Future, says Bernstein**

**Spot Bitcoin ETF Applications Facing Setback, SEC Calls them Inadequate**

Brokerage firm Bernstein predicts that there is a fairly high probability that the Securities and Exchange Commission (SEC) will approve a spot Bitcoin exchange-traded fund (ETF) in the near future. While the SEC has not yet approved a spot Bitcoin ETF, other countries like Brazil, Dubai, and Canada have already given the green light to similar ETFs.

However, recent applications for spot Bitcoin ETFs faced a setback when the SEC declared them inadequate. These applications, including those from asset manager BlackRock and Fidelity, lacked a clear surveillance-sharing agreement to mitigate fraud and manipulation concerns. Additionally, the applications did not specify which spot crypto exchange would be used for the ETFs, and therefore, would be subject to the surveillance-sharing agreement.

To address these concerns, CBOE refiled applications for Fidelity, WisdomTree, VanEck, Invesco, and Ark Investment Management, now specifying that it would enter surveillance-sharing agreements with Coinbase.

**SEC’s Approval of Leveraged Bitcoin Futures ETF**

The SEC recently approved the first leveraged Bitcoin futures ETF, called the Volatility Shares 2x Bitcoin Strategy ETF (BITX). Unlike a spot Bitcoin ETF, Bitcoin futures ETFs do not directly invest in Bitcoin. The BITX ETF uses debt or derivatives to capitalize on the price increases of Bitcoin futures contracts. However, it is important to note that the BITX ETF is not intended for casual investors, as the SEC filing warns that investors could lose money in a single day. This ETF is designed for active portfolio management and monitoring.

**Grayscale’s Bid for Bitcoin Trust Conversion to ETF Progressing Well**

Meanwhile, Grayscale’s attempt to convert its popular Grayscale Bitcoin Trust into an ETF appears to be progressing positively. A judge reviewing the case has cast doubt on the argument that futures and spot prices differ in terms of manipulation resistance. This raises the possibility of a spot Bitcoin ETF being approved soon.

According to the report, the court seemed skeptical that the futures price is not derived from the spot price. Therefore, allowing a futures-based ETF while disallowing a spot Bitcoin ETF may prove challenging for the courts to justify.

In conclusion, despite facing setbacks and inadequate applications, there is optimism surrounding the eventual approval of a spot Bitcoin ETF by the SEC. This approval would open up new investment opportunities and provide greater accessibility to the cryptocurrency market. Investors and industry players eagerly await the outcome, as the potential approval could have significant implications for the cryptocurrency ecosystem.

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