Bitcoin Bounces Back Following Reports Of SEC Talks With Exchanges Over Spot ETFs As Approval Window Closes

The price of Bitcoin (BTC) bounced back after tumbling below $36,000 on Friday after news dropped that the U.S. Securities and Exchange Commission has started engaging with cryptocurrency exchanges regarding myriad spot BTC exchange-traded fund applications. The crypto king was trading for $36,502 at publication time, a 1% 24-hour gain.

SEC Advises Exchanges On Cash Creates

The Bitcoin price last week surpassed the $38,000 level for the first time in more than 18 months when reports emerged that the U.S. Securities and Exchange Commission had an eight-day window to greenlight all spot crypto ETF filings. 

Investors interpreted the news as ultra-bullish, seemingly believing that a spot Bitcoin product could be on the horizon. While that window closes today, senior Bloomberg ETF analyst Eric Balchunas claims to be hearing chatter that the SEC has reportedly initiated discussions with exchanges concerning spot-based ETFs.

In a recent post on the X (formerly Twitter) platform, Balchunas noted that the SEC’s Trading and Markets division is advising these exchanges on the amendments they should make.   

“Hearing chatter SEC’s Trading & Markets engaged with exchanges this week on spot bitcoin ETF 19b-4s, is advising them they’d like the ETFs to do cash creates (vs in-kind), and has asked them to get in amendments in next couple weeks,” Balchunas tweeted.

The ETF specialist noted that the move, although expected, was a good sign. In Balchunas’ opinion, cash creates make sense as they lessen limitations on broker deals. He adds that only 2-3 spot Bitcoin ETF applicants had already included this while the rest had decided to go for in-kind.

“Nothing groundbreaking. Nothing changes. But shows progress is still happening and things moving forward,” fellow Bloomberg Intelligence ETF strategist James Seyffart remarked.

Expectations For SEC Approval In 2024 

The SEC currently has a bundle of applications from several traditional finance giants, including BlackRock, Fidelity, Ark Invest, and WisdomTree, for a spot Bitcoin ETF.

The spot-market product, if granted the regulatory nod, would allow investors to gain exposure to Bitcoin without the hassle of buying and storing the cryptocurrency themselves. Industry pundits have long predicted that such an investment vehicle would open the floodgates from institutional investors, resulting in a substantial influx of capital into crypto markets. As ZyCrypto reported previously, blockchain analytics firm CryptoQuant thinks it could catalyze a mega $1 trillion boost to Bitcoin and other cryptocurrencies.

The SEC on Nov. 17 delayed approval for spot Bitcoin ETFs from Global X and Franklin Templeton. Earlier this week, the Wall Street regulator similarly postponed applications from Grayscale Investments and Hashdex.

Nonetheless, Balchunas maintains that the delays and SEC discussions with exchanges do not change their odds up or down. The Bloomberg analysts remain convinced there is a 90% chance a spot Bitcoin ETF will get approved by the SEC by January next year.

Source: Read Full Article