SEC Finalizes Adjustments, Nearing Approval for Bitcoin Spot ETFs

Bitcoin (BTC) surged 6% on Monday, reaching $47,000 for the first time since April 2022, driven by favorable developments related to the Bitcoin spot ETF application. The price jump followed optimistic market responses to a declaration made by SEC Chair Gary Gensler.

Highlights

• On Monday, the price of Bitcoin (BTC) surged by 6%, reaching $47,000, a level not seen since April 2022, due to favorable advancements in the Bitcoin spot ETF application process.

• The increase in BTC price occurred as the market responded positively to a statement from SEC Chairman Gary Gensler.

• Although Gensler's statement did not specifically address the proposed spot bitcoin ETFs, the timing of his communication on X has generated interest within online crypto communities.  

SEC Requests Minor Adjustments to Final ETF Submissions

This week, Bitcoin exchange-traded fund (ETF) issuers submitted detailed management and trading fee documents to the U.S. Securities and Exchange Commission (SEC). The SEC has reportedly responded with a request for minor changes, with issuers like BlackRock, Grayscale, and Fidelity actively engaging in discussions with the SEC.

Recently, major exchanges, including CBOE, filed amended 19b-4 submissions on behalf of prominent issuers, following amended S-1 filings from the previous month addressing SEC feedback. Both the 19b-4 and S-1 filings require SEC approval before the ETFs can launch. Advocates of Bitcoin ETFs believe these products could provide traditional financial institutions with BTC exposure without requiring a wallet.

The SEC has previously rejected all spot Bitcoin ETF applications, but the ARK Invest (ARK) and 21Shares application for a spot Bitcoin ETF has a deadline of January 10, 2024. Analysts anticipate the SEC may approve multiple Bitcoin ETFs simultaneously on that date, barring any last-minute alterations.  

SEC Chair Gary Gensler Cautions Against Crypto Investment Risks Ahead of Potential Approval

SEC Chairman Gary Gensler offered candid guidance to prospective crypto investors as the market awaits updates on the potential approval of spot bitcoin ETF applications. Gensler stressed the inherent risks of crypto investments, highlighting instances of significant platforms and assets facing insolvency or devaluation.  

Gary Gensler, Chair of the SEC, Releases Public Statement Regarding Crypto Investments Ahead of Anticipated Spot ETF Decision/ Source: X

Even though Gensler didn't explicitly mention the ETFs, the timing of his recent post on X has attracted attention within the crypto community. This followed shortly after major asset managers, including BlackRock, Ark Invest/21Shares, VanEck, WisdomTree, Invesco, Fidelity, and Valkyrie, submitted amended S-1 forms for their proposed funds, an action seen as the final step before potential approval.

At present, the SEC is in the process of reviewing amended 19b-4 forms filed by exchanges such as Nasdaq, NYSE, and Cboe. Once approved, trading can begin when the S-1 forms become "effective." A decision is expected in the near future, aligning with the Jan. 10 deadline for the SEC's response to the initial applications, such as Cathie Wood’s ARK Investment and 21Shares. However, analysts acknowledge the SEC's authority to potentially postpone the decision.  

Bitcoin (BTC) Price Response to Gensler's Declaration Before ETF Decision/ Source: TradingView

Gensler's recent remarks were met with positive market response, as optimistic observers interpreted them as guidance from the SEC chair for potential traders considering entry after a presumed favorable decision. Within two hours of the statement, the price of Bitcoin surged by 6% to reach a 21-month high of $47,200.