According to Reuters, the U.S. Securities and Exchange Commission (SEC) is currently engaged in discussions over significant technical details with companies hoping to launch a Bitcoin exchange-traded fund (ETF). This is being interpreted as a strong indication that the SEC may soon approve applications for Bitcoin ETFs.
Up to now, 13 companies including Grayscale Investments, BlackRock, Invesco, and ARK Investments have filed applications with the SEC for ETFs that directly track Bitcoin and hold BTC. Market observers argue that a regulated investment product such as an ETF is the best way to invest in the spot price of the largest cryptocurrency.
The SEC has been reluctant to give the green light to such investment products, arguing that they do not meet investor protection standards. However, a U.S. court decided that the SEC was wrong to reject Grayscale Investments’ application to convert its Bitcoin investment trust into a spot ETF, changing the situation in August of this year.
The SEC’s approval would pave the way for cautious investors to access Bitcoin through strictly regulated exchanges and is seen as an important milestone for the cryptocurrency market. The approval of a spot Bitcoin ETF by the SEC is expected to generate $3 billion in demand within the first few days alone.
However, the SEC continues to express concerns over the susceptibility of Bitcoin prices to manipulation. The SEC is obligated to make a final decision on ARK Investments’ application by January 10th. Progress in the discussions indicates that the SEC could approve ARK Investments’ application and possibly the other 12 applications in the new year.