SEC faces a Wednesday deadline to approve or reject the first funds to hold the cryptocurrency. Expect some ETF approvals.
The Wall Street Journal reports The Crypto Industry Holds Its Breath in Anticipation of the First Spot Bitcoin ETFs
Excitement about the ETFs drove the price of bitcoin above $45,000 in recent days, its highest level in nearly two years. The token more than doubled last year in a rally that was turbocharged in June when BlackRock—the world’s largest money manager, with a near-perfect record of ETF approvals—threw its hat into the ring. Bitcoin is currently hovering around $44,000.
“People who bought bitcoin at low prices are sitting on really high unrealized profits,” said Julio Moreno, head of research at the data provider CryptoQuant. “Historically, when that happens, the price tends to correct.”
He predicted that bitcoin could fall to $32,000 if traders take advantage of the ETF launch to take some profits off the table.
The SEC faces a final deadline Wednesday to approve or reject the first applicant: a fund run by a joint venture of Cathie Wood’s ARK Investment Management and the crypto asset manager 21Shares. The agency previously deferred that decision three times. If the SEC changes its tune, it is expected to approve similar applications from other asset managers at the same time to avoid any perceived favoritism.
“It is completely unprecedented because historically we have not seen a situation where multiple issuers are going to be lined up to launch a high-demand product on the same day,” said Nate Geraci, president of ETF Store, an investment-advisory firm.
The wild card in the race is Grayscale Bitcoin Trust, which intends to convert to a spot bitcoin ETF upon SEC approval. The trust, which already has about $27 billion in assets under management, currently charges a 2% management fee.
Grayscale’s chief executive, Michael Sonnenshein, has said the firm will reduce the fee immediately upon conversion. The firm’s ad for its fund, known by its ticker, GBTC, has been spotted at more than a dozen major airports in the U.S.
“It’s going to be brutal particularly for some of the smaller issuers to compete with the likes of BlackRock and Grayscale,” said James Seyffart, an ETF analyst at Bloomberg Intelligence. “But the end investor is going to win here because that’s going to drive fees down.”
Another potential hiccup? Because of the cumbersome operational work involved, not all of the funds are expected to be ready to launch immediately, even if they are approved. Asset managers must open accounts with their custodians, set up data flows and complete other crucial steps ahead of time. Behind the scenes, Coinbase Global is listed as the bitcoin custodian on at least nine of the applications.
Fee Wars Break Out
Fee War Synopsis
How Many ETFs Needed?
What About Coinbase?
What Approvals to Expect
The SEC is highly likely but not guaranteed to approve something. I suspect multiple ETFs, including Blackrock, perhaps restricted to ETFs able to run within a week or two.
Sell the News?
I don’t know, but if so, for how long? No one knows that either. But absurd predictions abound.
Bitcoin to $1 million in Weeks
Bitcoin Will Hit $60,000 to $80,000 Tomorrow
If the only reason Bitcoin is not $60,000 to $80,000 now, then logic dictates Bitcoin will surge to at least $60,000 tomorrow.
It’s possible. $1 million in a week is not realistically possible.
Selling Stocks to Buy Bitcoin?
Addendum
Someone did a brilliant job of hacking the SEC’s account on Twitter.
There was no approval today.
Does the SEC really serve a purpose, other than a make-work hurdle? If this can get through, anything can get through. The SEC serves no real purpose, as evidenced by this ruling.
“Does the SEC really serve a purpose..”
Of course not. The only functions of any government which could even possibly serve a (useful at least) purpose, were strictly enumerated by the US founders. No SEC was mentioned. Hence case closed.
It will be volatile, but it should move higher if approved by the SEC. Reason being the initial demand and secondarily the halving event that will occur in April (less supply). This also hinges on the Fed cutting interest rates. It does well in a risk-on environment.
I’m thinking of releasing a Beanie Baby or Tulip ETF. Anybody interested?
WE LIVE IN THE GOLDEN AGE OF FRAUD
Check out the documentary that recently dropped on Netflix titled “Bitconned”.
It’s about CentraTech that claimed to have a debit card that seamlessly converted your crypto into fiat, but the entire thing was a fraud from beginning to end.
The documentary doesn’t imply that bitcoin itself is a fraud, but it does highlight one of bitcoin’s major weaknesses….it’s cumbersome to actually buy stuff with it.
And here I thought I was the only one left that remembers Tulips.
I forsee another GameStop like Flash and Crash. Get in fast and get out faster and you could make big money. I’m too old to trade that fast anymore.
“Tomorrow, What Should We Expect?”
Tomorrow: We expect volatility. Next year: A price significantly higher than $45K
Sell the news!
I’ve never bought crypto because it didn’t seem legitimate and I didn’t want to deal with wallets and such. If the SEC approves these ETFs then I think it legitimizes crypto and it allows people to purchase them through their broker.
My take: crypto ETFs will introduce a lot of new money and will push the prices higher.
Just like when a company first gets added to the S&P500, when a bunch of index funds need to add the stock to their portfolios at the same time, the prices get pushed up.
The SEC is hacker central.
I’m looking forward to the fund nicknames – perhaps ‘Biters’ is out there already?
Update. The SEC said a tweet went out that was inaccurate or not authorized. I guess the account was compromised.
No approval yet.
https://x.com/MishGEA/status/1744843317441953902?s=20
Well. They just approved ETFs a day early.
Cryptocurrency is a huge tax windfall for the Treasury. So the SEC most likely will bless it to regulate it. There may be some limits as to borrowing and lending. And coins tied to a currency have proven unstable, so no more pegging to currency.
How so? I can buy and sell the ETF in my tax deferred account. I think the SEC has made a big mistake here. They are very possibly underestimating demand. If Bitcoin grows to $10 trillion, can the financial system tolerate that, especially with wild spikes and crashes?
At least i can wipe my butt with a dollar. Try doing that with a shitcoin.
Taking some risk into tomorrow, via miners and not the coin itself. There is a good case that paper profits sell to excited retail and mark BTC down immediately following SEC approval(s). You make a good case about some/many ETFs not being ready right away. The $2BB Blackrock cannon is about 180% of recent daily $ trading volume in BTC, so that’s a big lift, but if we get a 3X volume day tomorrow, it may be retail rotating with the buyers assuming the near term risk while the paper profits ring their registers.