Bitcoin ETF Launch Moves Closer

According to Reuters journalists, discussions between the U.S. Securities and Exchange Commission (SEC) and the heads of asset management companies have taken a significant step forward. These talks are centered around the listing of Bitcoin exchange-traded funds (BTC ETFs) and the key technical details involved. Experts view this as a sign that the SEC may soon approve the applications, allowing these products to enter the market.

The SEC has until January 10, 2023, to make a final decision on ARK Invest's application, which is the first in line among the Bitcoin spot ETF proposals. Sources suggest that the advanced nature of the discussions indicates that the SEC is likely to approve ARK Invest's request and possibly some of the other 12 applications in early 2024.

Several prominent companies, including Grayscale Investments, BlackRock (BLK.N), Invesco, and others, are part of this development. Following a U.S. court ruling in August 2023 that found the SEC was wrong in rejecting Grayscale's application to convert its Bitcoin trust fund into an ETF, the Commission began discussing application details with issuers. These details include custody mechanisms, creation and redemption processes, and risk disclosures for investors.

Advanced negotiations between companies and the SEC have been a catalyst for the sustained price rally in Bitcoin, which has been ongoing for the past two months. ARK Invest's CEO, Cathie Wood, stated that the nature of the discussions has shifted, significantly increasing the chances of application approvals. ETF analyst at Morningstar, Brian Armor, commented, "I believe we will see several ETFs on the market simultaneously, allowing investors to choose the best product based on their preferences."

As of now, BlackRock has not responded to requests for comments regarding this situation. Invesco has also declined to comment on the current status of their applications and negotiations with the SEC. A representative from Grayscale stated, "Grayscale continues to collaborate constructively with the U.S. Securities and Exchange Commission. That's all for now."