Summary
- U.S. Investors have long waited for the approval of several Spot Bitcoin ETFs.
- A decision is expected anytime soon as the regulator has until Friday, U.S. time to make a decision.
- Analysts see the chance of approval around 75%, with a 95% chance of approval by the end of 2024.
Bitcoin Spot ETFs have been on the tip of the industry’s tongue since it was revealed the Securities and Exchange Commission (SEC) was strongly considering approving the assets for the first time. It appears the approval is edging toward completion, as the SEC is running out of time to appeal the recent court ruling that the SEC was wrong to reject Grayscale’s bid to introduce a spot Bitcoin ETF.
The TradFi Explosion
Analysts have predicted the likelihood of a spot Bitcoin ETF being approved by the end of this year is about 75%, with a 95% chance of approval by the end of 2024. It seems inevitable that funds will be introduced to the market sooner rather than later, as several financial institutions have already filed papers with the SEC to propose their new spot-based funds.
The acceptance of the first spot Bitcoin ETF won’t have a major bearing on Bitcoin’s short-term price, however it does spell a big moment for the industry as a whole. Massive names from traditional finance (TradFi) are licking their lips at the prospect of a Bitcoin-based fund that they can offer through non-crypto markets. The intersection between crypto and TradFi continues to strengthen, and more institutional money in the industry will help improve Bitcoin’s public perception.
Some big-name players that have filed for a spot Bitcoin ETF include:
- Grayscale
- BlackRock
- VanEck
- Invesco
Spot ETF vs Futures ETF
So far, investors in traditional markets can only access crypto through futures ETFs. These funds comprise contracts to buy/sell Bitcoin (or another digital currency) at a certain date, or at a certain price in the future. While these actively managed assets attempt to mirror the price movements of Bitcoin, many have yet to be successful and are trading at a significantly lower price than the equivalent amount of BTC.
Actual BTC would back a spot ETF, therefore allowing the fund to follow the price movements of Bitcoin closely. In addition, investors may be able to redeem their shares in a spot ETF for the equivalent amount of BTC, which is impossible via futures contracts.
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