US set for decisive week on Bitcoin ETFs

The final phase of a multi-year endeavour to introduce Bitcoin-backed exchange-traded funds (ETFs) in the United States is set to climax this week, faced with a series of crucial deadlines. Bloomberg News reports that all aspiring Bitcoin ETF issuers have until today, January 8, in Washington to present any late amendments to their pending applications.

Moreover, the US Securities and Exchange Commission (SEC) has to act on at least one of these applications by January 10, an occasion that industry insiders suspect might be used by the regulator to announce a set of decisions simultaneously.

A Bitcoin ETF can only commence trading after fulfilling two technical prerequisites. Initially, the SEC needs to give the green light to the 19b-4 filings by the exchanges wishing to list the ETFs. Secondly, the regulator has to approve the corresponding S-1 forms, which are the registration applications submitted by the potential issuers. Notable entities on this list include BlackRock and Fidelity.

Bloomberg News has also reported that the SEC is set to vote on the exchanges 19b-4 filings in the coming days. It remains uncertain whether the regulator will concurrently act on the issuer’s S-1 applications. If the SEC validates both sets of approvals, the ETFs could potentially begin trading on the next business day. The SEC, however, has refrained from commenting on the status of the applications.

Supporters of Bitcoin claim that ETFs backed by the leading cryptocurrency would represent a significant turning point for digital assets, with billions of dollars potentially flowing in from both retail and institutional investors. The market is still seriously underestimating the potential impact of a Bitcoin ETF approval, observed Michael Anderson, co-founder of crypto venture firm Framework Ventures.

However, the SEC, under both the Democrat Gary Gensler and his Trump-era predecessor Jay Clayton, has consistently declined to permit such a product, quoting concerns over investor protection and the potential for market manipulation.

Nonetheless, since August, when the SEC lost a significant legal battle against crypto asset manager Grayscale Investments, speculation has intensified that the regulator will eventually have to give in to the mounting demand for the product.

Bitcoins Value

This anticipation of regulatory approval has driven a surge of around 160% in Bitcoin‘s value last year, although this was insufficient to eclipse the record highs set in November 2021, when Bitcoin almost touched US$69,000.

Since the onset of 2024, the token’s value has mostly hovered around US$44,000. It witnessed a 2% decrease to US$43,400 at 11.15am today in Singapore, reflecting a broader dip in crypto markets at the start of the working week, reported Bangkok Post.