The crypto market and widespread community are buzzing with intrigue and optimism that the Securities and Exchange Commission (SEC) could potentially approve the launch of the first spot Bitcoin Exchange-Traded Funds (BTC ETFs), despite some current woes and worries that a contradictory decision could be communicated. Besides some of the most significant market players, investors, and other participants like trading firms have been continuously prepping for the arrival of the first BTC investment instrument, stocking up on the asset to ensure sufficient liquidity to meet a surprisingly high demand.
Significant capital has been injected into the US cryptocurrency market. Furthermore, according to data from Binance, the rally in Bicton’s price has led to notable interest being observed from laypersons and individuals with limited knowledge in the crypto market besides seasoned investors. Queries on questions about Bitcoin have multiplied, and now that the SEC hasn’t met investors’ expectations, a lot of noise is awaited in the crypto market until a conclusion is revealed.
Market players, issuers, authorized participants, and the larger investor community have a lot on their plates these days. Let’s discover why, how, and who are the main entities involved and prone to be the most impacted by the SEC’s final decision, as well as what keeps most investors’ hopes for significant BTC price hikes high.
An intro into today’s buzz in the crypto space
The first batch of spot BTC ETFs to be approved is still scheduled for January, having investors on the edge of their seats as the leading issuers wait for their notifications. ETF issuers and analysts remain optimistic about a potentially favorable conclusion from the SEC and hope to be able to start offering their services and trading ETFs as early as the upcoming week.
SEC could indeed deny the submissions, frustrated that this terrible outcome could turn true gaining ground. Matrixport, a crypto service platform also dealing with research, has suggested that rejection is now likelier than it was in the previous days. A potential culprit behind the failure could be the general unwillingness to embrace crypto disclosed by several agency members, and other stated motifs like the instability and significant volatility of the market.
The leading players suffering from a possible rejection will be enthusiastic investors who have prepared to expand their portfolios with ETFs and the leading issuers who have stocked up on assets to ensure sufficient liquidity.
The prime issuers
Leading spot BTC ETF fillers such as Hashdex, Fidelity, and Valkyrie have sent their remodified S-1 forms to the SEC as the members previously required on the back of a former postponement of their decision regarding the companies’ destiny. These focused on their Authorized Participants (AP), representing an essential milestone in their approval journey.
Here are the main participants who have sent submissions for spot BTC ETFs’ development.
Valkyrie
Valkyrie named the same actor as APs besides another one, and the likelihood is that other issuers will have expected authorized participants. The ETF launches common shares of beneficial interest, and to date, it has expressed ambition to go through the regulatory tussles to issue BTC ETFs. Steven McClurg, a company’s co-founder, expressed confidence in a positive result in November and hopes to persist now, to stay firm like many other optimistic stances.
BlackRock
having already expressed intent to work on a pure cash redemption strategy, the asset management firm has named their AP for their still-unaccepted ETF. This company was the first submitter to communicate who will buy BTC on their behalf, as the entity itself can’t legally make such a move. The collaboration was concluded, and trading company Jane Street and J.P. Morgan were appointed APs.
VanEck
Already invested in a cash redemption model, VanEck is yet to reveal specific details about their APs selection. The company ranks among the first to submit such proposals to the SEC and BlackRock. What the company disclosed, instead, is that they’ll charge a management fee on the ETF if the investment tools gain endorsement.
Fidelity
Jane Street was also chosen as AP, thanks to a decent total service cost. An exchange has already accepted the company’s proposal to list ETFs for BTC, and reps said shares should be registered as securities there.
Other unenumerated players with a significant role include but are not limited to Hashdex, Bitwise, Invesco/Galaxy, and WisdomTree, among others that compel the issuers’ group of 14 players. Market makers’ authorized participants (APs) and the SEC represent the towers of the following moves in the financial cryptosystem.
Grayscale, on a potential approval: the move could draw “new net demand” for BTC
Grayscale, a primary crypto management business, made the newspaper headlines when it won a lawsuit against the SEC in August of last year, marking a milestone in the history of crypto. According to the company’s reps, the triumph solidified a foundation for a spot BTC ETF to be birthed and launched. The voices of all of those who supported this development in the US to push the nation among the countries that have already launched spot BTC ETFs have been echoed the time Grayscale turned triumphant in the face of the SEC.
A rep of Grayscale expressed on their blog that approval from the SEC of trading spot BTC ETFs could not only allow more extensive exposure but also see investors leverage it and build a larger community of individuals using the entry into the digital asset investment world. All these perks could lead to a fresh net demand for the leading cryptocurrency since more and more investors would see a more viable and credible investment venture in Bitcoin.
The larger the mainstreamness, the better cemented the asset’s position is in the future and among the other well-established investment tools, like stocks and gold. Given the somewhat jammed supply backdrop and the upcoming halving reward in April of this year, fresh net inflows into BTC could favorably impact the cryptocurrency’s price.
All in all, to make sure that every considerable chunk of capital trades properly, authorized participants known as trading firms and market makers will conduct plenty of work.