SEC could today approve Bitcoin ETFs.
The question that still lingers in the minds of those who have yet to digest this news is: how did we end up here?
Grayscale’s victory in court over the SEC, TradFi entering BlackRock and the launch of Bitcoin futures ETFs all preceded today’s decision. These three events have all, in some way, contributed to the upcoming decision.
Many industry observers and executives believe that the SEC will allow Bitcoin ETFs trade on Thursday, even though the SEC has historically blocked such funds.
Many say recent developments do not indicate that SEC would be able to stop these products.
Blockworks reported that a person who is familiar with ETF filings said the SEC asked companies to correct bracketed or incomplete language within their registration statements before Monday.
The fund issuers have indeed changed the S-1 or S-3 form on Monday and/or Tuesday to reveal planned fund fees, among other things. BlackRock and Ark Invest as well 21Shares announced new fees intended for their products Wednesday.
The stock exchanges finalized the 19b-4 documents for issuers in the last week. Before bitcoin funds can launch, such proposals must be approved by the SEC.
Former SEC Chairman Jay Clayton told CNBC in a CNBC interview that it appears spot Bitcoin ETF approval is not likely to happen. “inevitable.”
The timeline
In 2013, the Winklevoss Twins began to push for an ETF that would track bitcoins. The SEC refused to approve the planned fund in 2017.
Gary Gensler stated at a virtual event in August 2021 that, after more than ten years of failures for prospective ETFs that hold bitcoin futures on the Chicago Mercantile Exchange CME, the SEC’s staff will look favourably upon funds planned that are limited to bitcoin contracts that trade only through the CME.
ProShares was the first firm to launch an ETF for Bitcoin Futures. Assets under management have grown from about $2 billion to approximately $3 billion.
Grayscale Investments proposed to convert its Bitcoin Trust (GBTC), which it had established in 2010, into an ETF for 2022. The SEC rejected this proposal. The firm sued the regulator, claiming its decision to do so — given its greenlighting of bitcoin futures funds — was “arbitrary and capricious.”
Grayscale won the case in August and Grayscale chose to not contest the ruling. Several segment observers saw the news as very encouraging for the spot bitcoin ETF.
“The Grayscale team is incredibly proud of the work we have done to grow GBTC into the world’s largest bitcoin investment vehicle, blazing a path forward for all spot bitcoin ETFs to come to market,” A spokesperson for the company said this in a press release.
BlackRock announced its bitcoin spot ETF before Grayscale’s court victory. The asset manager, which manages roughly $9 trillion in assets, has only ever had one of its proposed ETFs denied by the SEC, according to Bloomberg Intelligence analysts — a structure known as a nontransparent ETF that wouldn’t disclose daily holdings, as is standard.
Some have claimed that the fund giants’ position in the financial sector puts extra political pressure on SEC to approve spot bitcoin ETFs.
21Shares president Ophelia Snyder highlighted the ongoing dialogue between 21Shares and SEC in November when she said that these proposals are continuing to be amended with new language and fees. “pattern break” It could be that the ruling is different than previous rejections.
Gary Gensler, SEC chairperson, said that the SEC’s X Account posted on Tuesday that it had cleared bitcoin spot ETFs. “compromised,” Noting that regulators have not approved these funds.
Here we are. The SEC’s decision regarding spot BTC offers is due in the near future.
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