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US SEC Faces Decision on Acceptance of Bitcoin ETFs
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The decision would make it easier for governments and large companies to enter the cryptocurrency sector
January 9, 2024, 11.29pm
Updated January 9, 2024, 11:31 pm
Bitcoin ETFs are the big debate in the cryptocurrency world right now. To the point of having X’s account hacked by the US regulator. The U.S. Securities and Exchange Commission, better known as the SEC, has a pending decision on whether to approve them or maintain its block. The possibility of a reversal of direction has been evaluated for months, even if to date the US regulatory body has been reticent.
We explain why this decision is so anticipated, what ETFs are and what could happen in the future. It’s been several years since the SEC decided to block ETFs, but after several lawsuits and court decisions, the body led by Gary Gensler may change its mind.
ETF: Bitcoin exchange-traded fund. Bitcoin ETFs (Exchange Traded Funds) are exchange-traded funds. Investment funds where interested parties can be exposed to the value of Bitcoin, but without the need to directly buy or sell the cryptocurrency on exchanges.
Instead of being funds that track stocks or other assets, they track the price of Bitcoin based on futures contracts. This has one main advantage and that is that it allows you to invest in Bitcoin in a regulated and simple way, without having to trade cryptocurrencies or worry about wallets or all the tools normally associated with cryptocurrencies.
The SEC’s decision has been awaited since August. The SEC lost its court battle against Grayscale last August. The District of Columbia Court said Grayscale could operate Bitcoin ETFs. This judicial decision put on the table the possibility of the SEC regulating and permitting ETFs generally, as a court had already upheld their legality.
Since then, the cryptocurrency sector has spent months on hold and the value of the cryptocurrency has increased to above $45,000 in early 2024.
And when the day was about to arrive… the SEC’s account was hacked. A day earlier than expected, SEC account X posted a tweet explaining that the SEC had granted its approval for Bitcoin ETFs. A few minutes later, SEC Chairman Gary Gensler himself he denied the decision explaining that X’s SEC account had been hacked.
The SEC itself will have to investigate his tweet. The function of this body is to ensure that the market is not manipulated. And this is exactly what could have happened with the hack and the false publication that Bitcoin ETFs were approved. they point out from Fox Business.
The reaction from multiple companies and personalities in the cryptocurrency and technology sector was not long in coming. Cameron and Tyler Winklevosscofounders of Gemini, criticized the SEC for manipulating the market. Edward Snowden He also criticized Gary Gensler, noting that he “only had one job.”
What implications would the approval of ETFs have? Expectations for its approval are high. An SEC decision in this direction would facilitate the entry of institutional and large corporate money into the sector. One of these is the financial giant BlackRock, which already has a list of potential candidates.
In total there are approximately 2,000 ETFs in the United States, moving approximately $6.4 trillion in securities. An amount that could be much higher in the event of regulation by the SEC, since it would allow investors from the traditional financial world to bet on Bitcoin, equivalent to how they do with any company.
The decision is already awaited (and favorable). January 10 is the set date by which the SEC is expected to make a decision, as it is the deadline for ARK Investment and 21Shares to receive approval of their application. These are two investment funds that have applied to the SEC. Even giants like BlackRock and Fidelity are waiting.
According to Watcher.Guru, Bloomberg Intelligence believes there is a 90% chance that the SEC’s decision will be positive towards Bitcoin ETFs. Which would be a huge victory for the cryptocurrency sector and its comparison with the traditional financial world.
Image | Michael Fortsch
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2024-01-09 22:29:00
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