Bloomberg ETF analyst Eric Balchunas revealed information that could be a game-changer for the Bitcoin market. In his recent statements, Balchunas mentioned being aware of internal discussions regarding the possible approval of Bitcoin (BTC) spot ETFs by the SEC (United States Securities and Exchange Commission).
According to Balchunas, there was a crucial meeting between the SEC’s Division of Trading and Markets and several stock exchanges. The focus of this meeting? Forms 19b-4 related to spot Bitcoin ETFs. A notable point of this conversation was the SEC’s recommendation that exchanges adopt the cash generation method instead of the in-kind method for ETFs.
This suggestion is not trivial. In the cash generation approach, ETFs use cash capital to acquire the necessary assets, while in-kind contributions, the direct transfer of assets occurs. Such a change in enrollment practices is seen as a positive sign for the future approval of these ETFs.
Hearing SEC trading and markets talk involved with exchanges this week on spot bitcoin ETF 19b-4s, is warning them that they would like ETFs to make creations in cash (rather than in kind) and asking them to make changes in the next few weeks. This is not unexpected, but it is a good sign.
Hearing chatter SEC’s Trading & Markets engaged w/ exchanges this week on spot bitcoin ETF 19b-4s, is advising them they’d like the ETFs to do cash creates (vs in-kind), and has asked them to get in amendments in next couple wks. This isn’t unexpected but good sign nonetheless.
— Eric Balchunas (@EricBalchunas) November 17, 2023
The prospect of spot Bitcoin ETFs has excited the market. Such funds would provide investors with a more direct and regulated way to invest in Bitcoin compared to existing options such as ETFs based on Bitcoin futures. The possible approval of these ETFs is seen as a milestone in the integration of cryptocurrencies with the traditional financial system, potentially attracting more institutional investors.
However, it is worth remembering that we are still in the rumors and expectations phase. The SEC has not issued an official statement regarding the approval of these ETFs, leaving the crypto community in a state of cautious anticipation. The history of the cryptocurrency market has seen many ups and downs, and each announcement has the potential to significantly influence prices and investor confidence.
The development of the spot Bitcoin ETF market is, without a doubt, a topic to be monitored closely. With the growing demand for cryptocurrency investment options and continued interest from institutional investors, the next few weeks could be crucial in shaping the direction of this segment.
At the time of publication, the price of Bitcoin was quoted at US$36,446.76, down 0.1% in the last 24 hours.
The views and opinions expressed by the author, or anyone mentioned in this article, are for informational purposes only and do not constitute financial, investment or other advice. Investing or trading cryptocurrencies carries a risk of financial loss.