SEC Sets Deadline for Spot Bitcoin ETF Proposals, Signalling Potential Approval in Early 2024

The long-awaited decision on whether to approve exchange-traded funds (ETFs) tied to spot Bitcoin is nearing its deadline. According to reports, the U.S. Securities and Exchange Commission (SEC) has given issuers until December 29 to make final changes to their applications. This could potentially pave the way for a wave of launches in early 2024, reshaping the cryptocurrency landscape.

The SEC’s stance on spot Bitcoin ETF applications has been a source of contention for years, with multiple proposals being rejected due to concerns over market manipulation. However, recent developments indicate that the regulator may be shifting its views on these financial products. 

In a meeting with major financial firms such as BlackRock, Grayscale Investments, ARK Investments, and 21 Shares, the SEC signalled a potential green light for spot Bitcoin ETF proposals in early 2024.

This shift in stance is likely influenced by a recent federal appeals court decision that favoured Grayscale’s ETF proposal. The executives from the involved firms, who spoke under anonymity, revealed that the SEC had set a deadline of December 29 for submitting final updates. This would ensure inclusion in the initial approval wave, which is expected in early January. Representatives from stock exchanges Nasdaq and Cboe were also present at the meeting, further fueling speculation about potential listings for these ETFs.

The news of a possible approval has sent shockwaves through the market, with many anticipating a significant impact on the cryptocurrency sector. The SEC’s deadline for final changes has prompted issuers to scramble to comply, highlighting the importance of securing regulatory approval before year-end. Technical tweaks and fee disclosures have become a focus, with issuers eager to meet the demands set forth by the SEC.

Investors are also bracing for potential volatility and price swings in the Bitcoin market, as the approval of these ETFs could bring a surge of new capital into the space. The development marks a turning point in the cryptocurrency industry, which has long sought mainstream financial products directly linked to BTC.

In anticipation of potential launches, issuers have been preparing for “seeding” funds and ensuring market liquidity to support the initial trading of spot Bitcoin ETF products. While the initial seeding amounts are expected to be modest, it is projected that they will grow as the ETFs begin trading and attract more investors.