The SEC’s approval of a spot Bitcoin ETF in January is likely to be “confirmed” amid a flurry of updated S-1 filings from issuers like BlackRock, according to a K33 Research report.
According to K33 Research, the U.S. Securities and Exchange Commission (SEC) is expected to sanction Bitcoin ETFs in early January after engaging in progressive discussions with the issuer regarding a preferential redemption model for the ETF.
While not the most efficient structure for cash generation, the filer’s update is a further signal favorable to the ETF’s approval in the next three weeks.
– K33 Research Report
On December 18, this all-cash structure was converted from several issuers, including BlackRock and WisdomTree, who filed amendment applications with the SEC. The update leaves the door open for in-kind redemption if the U.S. securities watchdog decides to approve this alternative.
However, crypto.news reports that the SEC is likely to favor applications settled based on cash generation, requiring companies to hold fiat equivalent to the underlying Bitcoin (BTC) offered through exchange-traded funds.
ETF experts and cryptocurrency advocates are hoping for a favorable decision by January 10th, but there was no firm timeline for SEC approval at the time of going to press. Coincidentally, this is also the decision deadline for ARK Invest’s spot Bitcoin ETF jointly filed with 21Shares.
Speculators have also been discussing the impact a spot Bitcoin ETF could have on the price of BTC and the broader cryptocurrency market. On the one hand, institutional players such as Mike Novogratz and Bitwise predict that the token will surpass the total $69,000 set in November 2021 after billions of dollars have flowed into BTC.
Conversely, analysts at JPMorgan Chase, the largest US bank, argue that Bitcoin ETFs are overhyped. The bank’s researchers predict that spot Bitcoin ETFs will divert already deployed capital into other BTC operations and investment strategies, such as mining.