The path toward approval of Bitcoin exchange-traded funds (ETFs) in the United States appears to be moving forward significantly.
After years of rejections by the Securities and Exchange Commission (SEC) due to concerns about investor protection and potential market manipulation, there have been detailed discussions between the SEC and several major asset managers, such as Grayscale Investments, BlackRock, Invesco and ARK Investments.
— Reuters (@Reuters) December 7, 2023
These discussions have progressed to address crucial technical details, such as escrow arrangements, creation and redemption mechanisms, as well as risk disclosures for investors.
This suggests a change in stance by the SEC, which has historically been reluctant to approve cryptocurrency-linked products.
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This move could allow investors to access the world’s largest cryptocurrency through a highly regulated stock market, popularly known as ETF’S.
The market response has resulted in massive demand expected, possibly reaching $3 billion in the first days of trading.
Although the SEC has raised concerns about Bitcoin’s vulnerability to manipulation, advanced discussions have generated optimism among applicants.
The possibility of approval of ARK, which leads the queue of applications, and potentially some of the other 12 applications, suggests a change of attitude on the part of the regulator.
ARK President Cathie Wood has expressed confidence in approving multiple ETFs at the same time, which would provide investors with an opportunity to compare them and choose the most suitable one for their needs.
Additionally, key executives from companies including BlackRock, Grayscale and Invesco have held meetings with SEC officials since September, indicating an unusually high level of engagement and dialogue between the parties involved.
However, despite these developments, the SEC has not publicly confirmed whether it will approve Bitcoin ETFs.
Key points remain to be resolved, such as the cash or “in-kind” settlement mechanism, which could impact the timing of the final decision.