Competition is heating up to introduce the first Bitcoin ETF in the US. BlackRock and Bitwise, two big players in the market, have proposed their own ETFs, and the SEC is interested in these plans.
Both companies are vying for the chance to be the first to market a revolutionary investment product that will broaden the pool of people who can afford to invest in Bitcoin.
BlackRock’s application for the iShares Bitcoin Trust was official by the Securities and Exchange Commissionwhich represents an important step in the regulatory review process.
The company’s revised application included a “sharing monitoring” clause, partnering with cryptocurrency exchange Coinbase to monitor and report potential illicit activity. The move came after the Securities and Exchange Commission cited concerns about the initial application.
On the other hand, Bitwise also received acknowledgment of its spot Bitcoin ETF application, adding to the growing list of contenders seeking SEC approval. Besides BlackRock and Bitwise, other notable companies such as Invesco, Wisdom Tree, Fidelity, Valkyrie, and ARK Invest have entered the race, each including providing monitoring sharing in their applications.
The SEC officially accepts the BlackRock Spot Bitcoin ETF
► https://t.co/rclN7Hkk7P https://t.co/rclN7Hkk7P– decrypt (decryptmedia) July 15, 2023
Spot Bitcoin ETF according to Layman terms
In simple terms, a Spot Bitcoin ETF is a type of investment fund that allows people or institutions to purchase the popular digital currency Bitcoin (BTC). Exchange-traded funds, or ETFs, are financial products that track the price of an item or group of assets.
The word “spot” refers to the fact that the ETF trades directly in Bitcoin rather than Bitcoin futures or other derivatives. This means that the fund owns the bitcoins themselves, and not a contract or other token of their value.
By purchasing Spot Bitcoin ETF shares, people can be exposed to changes in the price of Bitcoin without having to buy and hold Bitcoin themselves. The ETF provider handles the purchase, storage, and secure custody of Bitcoin on behalf of clients.
Once approved, this type of ETF will be tradable on traditional exchanges, providing a bridge between the world of cryptocurrency and traditional financial markets.
Bitcoin ETF: Getting a SEC Nod
The cryptocurrency scene has recently seen a huge development as a result of the SEC accepting these applications. The Bitcoin spot ETF has long been seen as the “Holy Grail” in the sector due to its ability to attract a broader investor base and increase access to digital assets.
However, the SEC has been cautious in granting approvals, citing concerns about market manipulation and investor protection.
Bitcoin trading at $30,300 on the weekend chart: TradingView.com
With so many Bitcoin ETF applications under review, the SEC has an opportunity to evaluate different strategies and address the potential risks associated with such financial products. Competition among companies vying for approval is seen as a positive sign for the cryptocurrency industry, with the SEC’s various proposals offering a holistic perspective on this emerging market.
While the SEC has not yet approved a Bitcoin ETF in the US, Canada has taken a more forward-looking stance, with three major funds, including Purpose Bitcoin, 3iQ CoinShares, and CI Galaxy Bitcoin, already gaining approval. Regulators.
Open public comment period
Meanwhile, the formal SEC filing of BlackRock and Bitwise’s applications, along with several other contenders, will now trigger a 21-day public comment period, during which investors, industry experts, and other stakeholders can provide their input and comments.
An exchange-traded fund (ETF) that tracks the bitcoin price in real time could be a watershed moment, bridging the gap between the world of traditional finance and the frontiers of digital assets as interest in cryptocurrencies grows around the world.
However, with regulatory scrutiny a top priority, the SEC will carefully evaluate each proposal to ensure it complies with investor protection standards and market integrity.
Featured image via KITCO