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May 22, 2024
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Bitcoin ETF Approval in Finals Before SEC’s 19b-4 Submissions

Bloomberg analyst James Seyffart has shed light on the United States Securities and Exchange Commission’s (SEC) current predicament regarding approving a spot Bitcoin exchange-traded fund (ETF). In a recent private webinar with CryptoQuant, Seyffart suggested that the SEC faces a 90% likelihood of greenlighting the ETF. He argued that the SEC must devise new grounds for denial or concede to approval, given the recent court ruling favoring Grayscale over converting its Bitcoin Trust into an ETF.

Asset Managers Adapt to SEC’s Requirements

Since BlackRock’s application in June, there has been a flurry of activity. SEC officials engaged in extensive meetings with asset managers, addressing concerns and suggesting modifications. Seyffart disagreed with Matrixport’s prediction of potential rejections, citing the progress made by asset managers in meeting the SEC’s requirements, especially in terms of surveillance agreements with platforms like Coinbase.

Final Decision on Bitcoin ETF’s

Eric Balchunas, another industry analyst, confirmed the advanced stage of the approval process. He tweeted,

“SEC is giving final comments as we speak, then issuers will submit final 19b-4s and S-1s soon after.” 

This statement aligns with Jacquelyn Melinek’s report from sources extremely close to the matter: “The SEC will approve the bitcoin spot ETF for multiple firms’ applications.”

Potential Market Impact and Institutional Caution

Seyffart predicts a major market impact, with a potential influx of $10 billion into Bitcoin ETFs in the first year. However, he cautioned that reaching the $100 billion mark, akin to U.S. gold ETFs, might take longer. He also highlighted the cautious approach of institutional investors, who require thorough due diligence and often rely on approved investment lists, indicating a gradual adoption process among sophisticated traders.

Significantly, the cryptocurrency sector eagerly anticipates the SEC’s final decision, due by January 10. Seyffart expects a collective nod from all applicants, with Grayscale’s conversion potentially taking a few additional days. This decision could mark a transformative moment in the crypto market, setting a new precedent for institutional investment in cryptocurrencies.

Read Also: Spot Bitcoin ETF: Poll Shows Lower Than Expected Advisor Optimism

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