- On January 5th, the crypto world got excited over baseless rumors that the U.S. Securities and Exchange Commission (SEC) had approved the long-awaited Bitcoin ETFs.
- Bloomberg analyst James Seyffart stated, “It would be extremely fitting for Gary to find a way to scam everyone in crypto.”
- Although it seemed like an imminent approval, it doesn’t mean the drama has ended. There are still two major questions with no clear answers.
Spot Bitcoin ETFs are certain to gain approval, but could there still be concerns? What happened recently?
Concerns for Spot Bitcoin ETFs
On Friday, January 5th, the crypto world got excited over baseless rumors that the U.S. Securities and Exchange Commission (SEC) had approved the long-awaited Bitcoin ETFs. Since that did not happen, attention turned to a 11-page letter from an organization called Better Markets.
The letter warned that approving Bitcoin ETFs would be a “grave, even historic mistake” and would seal the U.S. into a market “completely contaminated with fraud and manipulation.” The submission of the letter at the 11th hour (just a few days before the SEC was set to vote on a pending Bitcoin ETF application) and its origin from allies of Gensler and Warren led some crypto observers to fear that the approval process would once again derail.
Bloomberg analyst James Seyffart stated, “It would be extremely fitting for Gary to find a way to scam everyone in crypto.” Despite tweets expressing concerns about the letter, the likelihood of Better Markets’ letter being a last-minute conspiracy piece to help Gensler, known to be anti-crypto, sabotage Bitcoin ETF applications is low.
This is at least the case when the group’s letter is examined more closely, revealing inaccuracies in the initial application date and the fact that Better Markets did not even attempt to provide an updated list of companies requesting a Bitcoin ETF. Consequently, the prevailing theory about how and when the SEC will grant approval is likely accurate. This theory suggests that the agency will simultaneously approve a series of applications to avoid giving any potential Bitcoin ETF issuer a starting advantage on Wednesday, January 10th, the day when the agency is expected to respond to an application after being rejected in court.
Questions are not over yet
Even though it seems like imminent approval, it doesn’t mean the drama has ended. There are still two major questions with no clear answers. The first question is which company will capture a significant portion of the market – BlackRock, Grayscale, or someone else. The second question is what SEC approval for ETFs will mean for the price of Bitcoin.
The most discussed bear scenario involves the assumption that any price resulting from SEC approval has already formed, and when investors “sell the news,” Bitcoin will fall. The bull case is more nuanced but also challenging. It includes the idea of “model portfolios” involving large financial entities like BlackRock simply cutting and pasting ready-made investment portfolios, as suggested by an ETF expert to Axios.
