If an ETF is approved, a “black swan effect” could be triggered with a significant impact and volatility, most likely upward.
According to leaks mentioned by Fox Business, the United States Securities and Exchange Commission (SEC) could make history in the industry in early 2024 with the approval of the first spot Bitcoin ETF.
Sources close to the SEC mentioned to Fox network that January 10, 2024 could be the date for when the regulator gives the long-awaited approval for the financial instrument. This is precisely the date on which the deadline for the US Securities and Exchange Commission to approve or deny the application that Ark Investment Management submitted at the time with 21Shares for the deployment of its Bitcoin ETF expires.
However, it is believed that not only this request will be approved, but that several will, too.
Why Has It Taken So Long for the Bitcoin ETF to be Approved?
Several investment funds and players in the financial world have tried to obtain Bitcoin ETF approval within the United States, however, their applications have been met with constant rejection from SEC officials.
Dave Weisberger, co-CEO of CoinRoutes, has mentioned that the possible reason for the SEC’s refusal has to do with the tension against digital assets that American regulators currently maintain, adding that there is still a perception that Bitcoin is used for illegal purposes.
At the same time, a former SEC official who shared with Fox Business mentioned that the constant rejection of ETFs is due to the “general aversion” of Gary Gensler, Chairman of the US Securities and Exchange Commission, towards digital assets in general, including Bitcoin.
However, pressure from big players on Wall Street, such as Larry Fink, CEO of BlackRock, the world’s largest money manager, has begun to be felt in the fight for approval.
Fink, according to Fox Business, has marked the approval of a Bitcoin ETF as a key priority for his corporation and has come to consider the market’s main cryptocurrency as an “international asset” that competes with gold for the definitive title of “store of value.” In fact, last Tuesday BlackRock had its last meeting with American regulators to evaluate its Bitcoin ETF application.
Despite all these efforts, there is always the possibility that the SEC will once again deny ETF applications, although inside sources shared with Fox Business that this was “unlikely.”
The sources confirmed that the Commission was pressured by the August decision of the Washington D.C. Court of Appeals, where, knowing of the SEC’s denial of the Grayscale ETF, it classified the regulator’s denials as “arbitrary and capricious,” allowing the asset manager to get his case reassessed.
Why Are Bitcoin ETFs So Anticipated?
Analysts’ expectations, according to Félix Fuertes, CEO of Investment Training and expert in the crypto space, remain very heated due to the possible changes that this could bring to the crypto ecosystem.
According to Fuertes, the possible approval of the SEC could be the event that will trigger a “black swan effect” with a significant impact and volatility, most likely upward. It would generate an increase in liquidity and demand, influencing futures and reducing the supply of Bitcoin, which could result in considerable price movements in the months following approval.
By Leonardo Perez
