Smaller Companies May get Their Bitcoin ETF Approved First
The SEC may soon approve a Bitcoin ETF, with big firms like BlackRock waiting for a decision. This could change how people invest in crypto.
The U.S. Securities and Exchange Commission (SEC) is thinking about allowing a new type of investment in cryptocurrency, called a spot cryptocurrency exchange-traded fund (ETF).
BlackRock, a big investment company, recently applied to the SEC to have its own Bitcoin ETF. They also agreed to share data with a crypto trading company, Coinbase, thinking this might help their application.
There are many companies like ARK Invest and BlackRock that have applied to the SEC for this type of investment. The SEC can take up to 240 days to decide on these applications. However, they have not yet approved any company's request for a spot Bitcoin ETF.
Spot Bitcoin ETFs are different from other investments because they involve directly holding Bitcoin. The Winklevoss twins first tried to get approval for such an investment in 2013, but the SEC said no.
Stuart Barton from Volatility Shares, another company, said that his firm talked a lot with the SEC about their application. He thinks that smaller companies might have a better chance to get approval than bigger ones.
Many big companies like BlackRock, ARK Invest, and others are waiting for the SEC's decision on their ETF applications. The latest possible time for the SEC to decide on some of these is March 2024.
The SEC is cautious about the crypto market. They are currently looking into how companies like Coinbase, Binance, and Ripple are operating. Many people believe that the rules for crypto in the U.S. need to be clearer.
The U.S. government is also trying to decide how best to control digital money. There have been court decisions, like the one in the SEC vs. Ripple case, that have made things more complicated.
Bartonbelieves that the SEC has a lot of power in this situation. Some experts think that there's a 65% chance that a Bitcoin ETF will be allowed in the U.S., especially because of BlackRock's application. Some also think that the SEC might approve several applications at the same time, so no company gets an unfair advantage.
