Background
Bitcoin is a decentralized digital currency. It is not controlled by any organization or institution, but is maintained and verified by an open, distributed network. The value of Bitcoin depends on the market's supply and demand, as well as people's confidence and expectations for its future.
Bitcoin’s innovation and potential have attracted the attention of many investors and institutions, but it also brings some challenges and risks. Transacting and storing Bitcoin requires the use of special software and hardware, as well as an understanding of cryptography. Bitcoin transactions are also affected by the laws and regulations of different countries and regions, and sometimes even face the threat of bans or restrictions. Bitcoin’s market also lacks transparency and standardization, making it susceptible to manipulation and fraud.
In order to solve these problems, some financial institutions and companies have proposed a new investment tool, namely Bitcoin ETF.
Bitcoin spot ETF and Bitcoin futures ETFBoth are methods that allow investors to obtain Bitcoin without directly holding or managing it. An exchange-traded fund with exposure to Bitcoin price fluctuations. They all trade on traditional stock exchanges, providing greater liquidity and flexibility.
But the underlying asset of the Bitcoin spot ETF is Bitcoin itself, its performance is directly linked to the real-time price of Bitcoin. The underlying asset of the Bitcoin Futures ETF is a futures contract related to Bitcoin. Its performance is affected by contract market dynamics and may be significantly different from the spot price of Bitcoin.
It can be said that the Bitcoin spot ETF is an investment fund that tracks the spot price of Bitcoin. It trades on traditional stock exchanges, just like ordinary Same as stocks. The advantage of a Bitcoin Spot ETF is thatit allows investors to gain exposure to Bitcoin price fluctuations without directly holding or managing Bitcoin.
In this way, investors can avoid Bitcoin's technical and security issues while enjoying Bitcoin's growth potential. Another advantage of a Bitcoin spot ETF is that it can increase Bitcoin’s legitimacy and credibility.
Currently, many countries and regions around the world have approved the listing and trading of Bitcoin ETFs, such as Canada, Brazil, Germany, Switzerland, etc. .
However, the United States, as the world's largest financial market, has not approved any Bitcoin ETF. The main reason is that the U.S. Securities and Exchange Commission (SEC) There are concerns about currency market manipulation, fraud, transparency and regulation.
SEC’s concerns
Bitcoin spot ETF is subject to securities Supervision and regulation by regulatory agencies such as the Exchange Commission (SEC), which means that it needs to comply with certain standards and requirements to protect the interests of investors and the public interest. The launch of a Bitcoin spot ETF could also increase Bitcoin’s liquidity and transparency, thereby reducing market volatility and the possibility of manipulation.
The concept of Bitcoin spot ETF has existed for many years, but so far, the US SEC has not approved any application, mainly based on the following points:
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The risk of fraud and manipulation in the Bitcoin market. SEC believes that the Bitcoin market lacks transparency and supervision and is susceptible to the influence of manipulators, which may harm investors and public interests.
Bitcoin Security and Custody question. The SEC is concerned that Bitcoin storage and transactions are at risk of being stolen, lost or damaged, and that existing custody solutions may not meet its standards.
Bitcoin Liquidity and Pricing question. The SEC questions whether Bitcoin’s market depth and liquidity are sufficient to support a stable ETF, and whether Bitcoin’s price remains consistent across different trading platforms.
Bitcoin’s regulatory and legal issues . SEC pointed out that the legal status and regulatory framework of Bitcoin differ in different countries and regions, which may lead to uncertainty and conflict.
However, with the development and improvement of the Bitcoin market, and the precedents of other countries and regions, the Bitcoin spot ETF’s The outlook remains promising. At present, many well-known financial institutions and companies have submitted applications for Bitcoin spot ETFs to the SEC, including BlackRock, Ark Invest, Fidelity, etc.
If the Bitcoin spot ETF is approved, it will be a major breakthrough in the history of Bitcoin and a milestone in financial innovation.
Bitcoin spot ETF will bring more investors and institutions to Bitcoin, thereby promoting the popularity and adoption of Bitcoin. Bitcoin spot ETFs will also provide investors with more choices and convenience, thereby increasing the value and influence of Bitcoin. The emergence of Bitcoin spot ETF will bring Bitcoin closer to becoming a global, universal, credible and sustainable digital currency.
Latest Development
Previously, many financial institutions reported to SEC filings for Bitcoin spot ETFs include Bitwise Asset Management, Wilshire Phoenix, WisdomTree Investments, Kryptoin Investment Advisors, NYDIG Asset Management, Valkyrie Investments, SkyBridge Capital, Fidelity Investments, Global X, Invesco, Goldman Sachs, ARK Invest and BlackRock wait. Some of these applications have been rejected, some have been withdrawn, and some are still pending.
As of January 9, 2024, the latest progress of some applications is as follows:
Bele Eleven Bitcoin spot ETF applicants, including Deutsche, Valkyrie, Ark Invest, Fidelity, Bitwise, Grayscale, Hashdex, Invesco, WisdomTree, Franklin Templeton and VanEck, have submitted revised 19b-4 documents. Document 19b-4 is a proposed change to stock exchange rules to allow ETFs to trade.
The spot Bitcoin ETF "Wisdomtree Bitcoin Trust" (code BTCW) launched by the asset management company WisdomTree has been listed on the DTCC (U.S. Securities Depository and Clearing Corporation) website Out, the Create/Redeem column displays N.
BlackRock files a securities registration application, Form 8-A, for its spot Bitcoin ETF with the U.S. Securities and Exchange Commission (SEC) for its iShares Bitcoin Trust . The issuer’s Form 8-A filing allows the issuer to register for trading on the exchange and signals progress toward potential approval of a spot Bitcoin ETF.
VanEck Bitcoin Spot ETF "VanEck Bitcoin Trust" (code: HODL) has been listed on the DTCC (U.S. Securities Depository and Clearing Corporation) website, and the Create/Redeem column is displayed as N. According to previous news, the latest revised S-1 filing showed that VanEck has injected US$72.5 million in seed funds into its Bitcoin spot ETF.
Bitwise has injected $500,000 in seed funding for its Bitcoin spot ETF. At the same time, Pantera Capital plans to inject $200 million into Bitwise’s Bitcoin spot ETF once approved.
Invesco/Galaxy has submitted a securities registration application (Form 8-A) for the Bitcoin Spot ETF to the U.S. SEC.
The latest Bitcoin ETF rates are summarized as follows:
The history of well-known institutions
BlackRock
BlackRock Bitcoin ETF BlackRock is the world's largest asset management company, managing more than $9 trillion in assets.
The company submitted an application to the SEC called BlackRock Bitcoin ETF on June 15, 2021, which included a new provision, namely surveillance Surveillance-sharing agreement, which allows the company to detect fraud and manipulation in the Bitcoin market.
The application attracted widespread attention in the industry because BlackRock has a near-perfect record with ETF applications, with only 1 out of 576 applications be rejected. In addition, BlackRock CEO Laurence Fink has also stated that he is open to Bitcoin and believes that Bitcoin may become a global asset.
Fidelity
Fidelity is one of the world's largest financial services companies, managing more than 4 Trillions of dollars in assets. The company submitted an application to the SEC on March 24, 2021, called Wise Origin Bitcoin Trust, which is sponsored by FD Funds Management LLC, a subsidiary of Fidelity, and custodian by Fidelity Digital Assets Services LLC.
The highlight of the application is that the company already has extensive experience and resources in the Bitcoin market, including providing Bitcoin custody, trading and research services, And own your own Bitcoin mining farm. In addition, the company also has a strong brand influence and customer base, which can attract more institutional and individual investors.
ARK
ARK is an investment management company focusing on innovation, managing more than $60 billion in assets. The company submitted an application to the SEC on August 11, 2021, called the ARK 21Shares Bitcoin ETF, which is sponsored by ARK ETF Trust, a subsidiary of ARK, and advised by 21Shares AG.
The application is characterized by the fact that the company has successfully launched two Bitcoin ETFs in Canada, namely Purpose Bitcoin ETF and Evolve Bitcoin ETF. Both ETFs were approved by the Canadian securities regulator in February 2021. It is also the first batch of Bitcoin spot ETFs in North America. Additionally, the company’s founder and CEO, Cathie Wood, is also a well-known Bitcoin supporter and has stated that she believes the price of Bitcoin will reach $500,000.
Comments from all parties
Currently, the SEC has not made any A Bitcoin Spot ETF Application Makes the Final Decision.
But what decision might the SEC make? Currently, the industry has different views on this.
Bloomberg ETF analyst Eric Balchunas tweeted that the trading volume of GBTC (Grayscale Bitcoin Trust) today reached nearly 500 million US dollars, < strong>This exceeds the current trading volume of 99% of the 3,000 ETFs. Balchunas noted that if Grayscale launched its product (Bitcoin Spot ETF) along with other companies, they would have an advantage in trading volume, however, he also mentioned that the 1.5% fee may act as a deterrent.
Standard Chartered Bank stated thatthe capital inflow after the approval of the Bitcoin spot ETF in 2024 may reach between US$50 billion and US$100 billion. By the end of 2025, the price of Bitcoin may reach $200,000.
Bloomberg ETF analyst Eric Balchunas said: "BlackRock adjusted its Bitcoin spot ETF fee to 0.3% in the latest filing. This is lower than my previous forecast, so I think this will make Other competitors face a tougher competitive situation. And 20 minutes after BlackRock submitted its ETF update document, ARK dropped the fee to 0.25% in its ETF update document. As soon as they launch, thefee war will break out .”
In addition, Bloomberg reports that a series of important deadlines are coming this week,marking a multi-year push The culmination of efforts to launch a Bitcoin-backed exchange-traded fund (ETF) in the United States. Gold ETFs have more potential problems (impurities, fakes, etc.) than Bitcoin ETFs. No one is forcing anyone to buy a potential Bitcoin ETF. ETFs don't change Bitcoin itself. They are just an option. The good thing about the free market is that we can let the market decide whether a Bitcoin ETF has value.
John Palmer, president of CBOE Digital, said that the potential approval of a Bitcoin spot ETF will drive growth in the derivatives market and provide pension funds and RIA funds with opportunities to invest in Bitcoin spot ETFs pave the way.
Mathew McDermott, head of digital assets at Goldman Sachs, said the potential approval of spot bitcoin and ethereum exchange-traded funds (ETFs) will increase institutional interest in cryptocurrencies. McDermott said: "First of all, it broadens and deepens the liquidity in the market. Because this is actually creating institutional products that can be traded by institutions that don't need to be exposed to naked assets, I think this opens up the pension market , insurance companies and other fields.”
A poll by Bitwise, about 40% of financial advisors said they trust U.S. investors A Bitcoin ETF will be launched in 2024, while others are less sure. The survey also found that even though most advisors believe a Bitcoin ETF is unlikely to be approved this year, 88% of respondents interested in buying Bitcoin on behalf of clients are waiting for an ETF to become available. Roughly 60% of respondents said clients were involved in cryptocurrencies outside of their relationships with financial advisors, which Bitwise sees as a promising sign for companies considering whether to launch crypto products.
Finally
In short, the Bitcoin spot ETF is a It is an investment product of great significance that allows investors to participate in the Bitcoin market more conveniently, safely and legally. It can also promote the liquidity, transparency and legality of Bitcoin and promote the widespread adoption and development of Bitcoin.
However, the launch of Bitcoin spot ETF is not easy. It requires strict review and approval by the SEC, and the SEC’s decision will have a negative impact on Bitcoin. have a significant impact on the currency market. Currently, the SEC has not made a final decision on any application for a Bitcoin spot ETF.
But no matter what, BTC is about to usher in the college entrance examination score moment, we should pay close attention to the dynamics of the SEC and the changes in the Bitcoin market in order to Make sound investment decisions.
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