Transparency Crucial for Approval of Spot Bitcoin ETFs

Industry activist Samson Mow, CEO of Jan3, emphasizes the necessity of on-chain address disclosure for potential issuers of spot Bitcoin exchange-traded funds (ETFs) to secure competitive advantages.

Verification Challenges Surround Spot Bitcoin ETF Approval

Amid heightened anticipation for the approval of spot Bitcoin ETFs in the United States, concerns loom regarding transparency and validation of the ETFs.

Lack of On-Chain Proofs Raises Concerns

Despite the excitement, none of the 14 existing ETF applicants have opted to provide on-chain proofs, leading to skepticism among observers about the authenticity of these offerings.

Stressing the Importance of Actual Bitcoin Holdings

Bloomberg ETF analyst Eric Balchunas highlights the significance of ETF issuers holding genuine Bitcoin to uphold their credibility.

Calls for Verification Methods

Leah Wald, co-founder and CEO of Valkyrie, suggests potential investors verify spot BTC ETF holdings by reviewing publicly accessible records from the ETF provider, akin to equity ETF verification.

Regulatory Oversight and Security Concerns

While regulators plan to monitor the underlying asset holdings for transparency, some applicants, like Grayscale Investments, cite security concerns for their reluctance to disclose addresses.

Transparency Key in the Race

Mow underscores the competitive significance of transparency in the spot Bitcoin ETF race, acknowledging the potential for unbacked ETFs despite existing regulations.

Expectations of Approval and Fee Competition

The SEC is expected to greenlight the first spot Bitcoin ETFs in early January, with analysts eyeing January 10. Yet, fierce fee competition among issuers, such as Invesco and Galaxy, offering fee waivers, adds complexity to the scenario.

Potential SEC Approval and Future Considerations

Analysts predict a 90% chance of SEC approval by January 10 but caution about the possibility of a rejection due to additional regulatory considerations, an event they dub as a substantial setback.