There is a high possibility that the U.S. Securities and Exchange Commission (SEC) will approve several spot bitcoin ETFs that will likely affect the Bitcoin price.
Spot bitcoin ETFs are funds that hold physical bitcoins and trade them on the exchange. These funds provide easy access to bitcoin for investors and eliminate issues such as security, custody and taxation. Spot bitcoin ETFs are different from futures-based bitcoin ETFs. Futures-based bitcoin ETFs are based on bitcoin futures contracts and these contracts need to be renewed when they expire. This can cause additional costs and price deviations.
The SEC previously rejected Grayscale’s application to convert its Grayscale Bitcoin Trust (GBTC) into an ETF but approved a number of futures-based bitcoin ETFs. However, SEC Chairman Gary Gensler said in a speech in July that he was more favorable to spot bitcoin ETFs. Gensler said that spot bitcoin ETFs could increase investor protection and reduce market manipulation. After Gensler’s statement, several spot bitcoin ETF applications were made to the SEC. Some of them came from well-known companies such as VanEck, WisdomTree, Kryptoin and Valkyrie.
Daniel Lim, co-founder of a crypto asset management company called Matrixport, believes that the SEC will approve several spot bitcoin ETFs by the end of this year. According to Lim, spot bitcoin ETFs will positively affect the Bitcoin price and trigger a new bull run. Lim says that spot bitcoin ETFs will have more demand than futures-based ones and will have lower fees. Lim says, “A physical bitcoin ETF will likely carry a management fee of 0.7-1% which could still bring in $200m per year”.
In summary, if the SEC gives the green light to spot bitcoin ETFs, it could be a great opportunity for the Bitcoin market. Spot bitcoin ETFs will provide easier, safer and cheaper access to bitcoin for investors and boost the Bitcoin price. It is not clear when the SEC will make a decision on this issue, but some experts like Matrixport’s co-founder Lim expect positive news by the end of this year.
Sources:
: SEC Likely to Approve Several Spot ETFs Sparking Next Bitcoin Rally: Matrixport
: Bitcoin ETF Applications Should Be Treated Fairly, Grayscale Says
