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The Cryptocurrency Sphere is Ready to Take Bitcoin ETFs to the Masses

Updated: Feb 29

The cryptocurrency community is banking on its arrival in the mainstream, with the outcome heavily reliant on the approval of Wall Street's leading regulatory authority.

Bitcoin ETFs

Image from Freepik

In the upcoming days, the Securities and Exchange Commission (SEC) is anticipated to decide on the approval of 14 different money managers seeking to launch spot Bitcoin exchange-traded funds (ETFs). If granted, these ETFs would provide an avenue for everyday investors to gain exposure to bitcoin (BTC-USD) without direct ownership, enabling them to trade it similarly to stocks.

The potential approvals hold the prospect of broadening the acceptance of the world's largest cryptocurrency, potentially integrating bitcoin into common investment vehicles such as 401(k)s, IRAs, and pension plans utilized by the general public.

Prominent names from Wall Street, including BlackRock and Franklin Templeton, alongside well-known entities in the crypto space, are among the applicants. Notably, major banks like JPMorgan Chase and Goldman Sachs have expressed their readiness to assist some of these money managers in the creation and redemption of shares for their new funds.

The industry faces a hurdle as the SEC has previously rejected similar applications, citing concerns about the susceptibility of these products to market manipulation. The regulatory body has been a significant antagonist, initiating multiple lawsuits and enforcement actions against key industry players.

However, insiders in the cryptocurrency realm suggest there are indications that this time the SEC may not impede the process and could potentially grant approval to all 14 applicants simultaneously.

Closer and Closer to the Big Event

ETF issuers and analysts express confidence that the SEC will opt to grant approval to all qualifying applications by the initial January deadline. This approach is seen as a measure to prevent providing a competitive advantage to the first movers in the industry.

Cathie Wood, CEO of Ark Investment Management and one of the applicants, conveyed to Yahoo Finance that the leading providers of spot bitcoin ETFs will likely be those attracting the highest investor funds right from the start. According to Wood, the winners in this scenario will be a select few, primarily determined by their liquidity.

It is worth to note that in the past, introductions of other bitcoin products have triggered significant fluctuations in bitcoin's price.


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