Key Insights
- So here’s the deal – the SEC has to decide on Bitcoin spot ETF applications by January 10th.
- Lots of folks think approvals are coming, but some analysts warn requirements still aren’t locked down.
- So which way will SEC regulators jump – yay or nay?
NEW YORK – Expectations run high the U.S. Securities and Exchange Commission (SEC) could finally approve the listing of spot exchange-traded funds (ETFs) this month, opening up crypto investments to millions of mainstream stock investors.
But not everyone in the industry is convinced after years of rejection. Some vocal doubters argue all chief requirements are still unmet ahead of a key Jan. 10 target decision date on multiple spot Bitcoin ETF applications. Speculation and positioning has consequently mounted from both camps this week.
The prevailing consensus anticipates SEC approval of Bitcoin spot ETFs by next week,” said analyst Markus Thielen of research group 10x in a Jan. 3 report. “We however see an opportunity to trade against consensus, emphasizing the risk that proposals fall short of critical requirements for approval.
Approvals remain favored by others given strengthened oversight and pressing institutional demand amid 2022’s market mayhem forcing the issue. Legal experts even argue recent court decisions mean the SEC has limited leeway to just kick proposals down the road again.
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The SEC can greenlight or deny two pending spot ETFs from ARK Invest plus Swiss firm 21Shares by Jan. 10 per application rules. Approving the first product is also expected to quickly open floodgates to rivals.
I expect multiple approvals on Jan. 10,” tweeted James Murphy of investment advisors Ludlow Street this week. “The SEC shot all their bullets against Grayscale. The Court would very likely find (new rejections) pretextual.
Goldman Sachs also said it expects an imminent breakthrough as new guardrails are erected, with BlackRock and major exchanges all lobbying for increased crypto access and revenue streams. JPMorgan likewise argues an approval is overdue to satisfy legal requirements and investor protections now locked in.
Yet doubts persist over whether the required checks and balances can truly be finalized in a few days given years of blockchain opacity. Outright rejection may remain the path of least resistance near-term, albeit with vocal challenges.
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Either way, conditions seem ripe for resolution one way or another – hopefully avoiding the overhyped speculation and market ructions seen following past SEC fake-outs in this long-running crypto policy saga.