Emotional Turmoil at the SEC: Will Bitcoin ETFs Triumph or Falter?

• Financial

In the world of finance, all eyes are currently on the Securities and Exchange Commission (SEC) as the regulator deliberates over the approval of a spot Bitcoin ETF (Exchange-Traded Fund). There's mounting speculation that the agency could release a joint decision covering all pending applications.

Intense Pressure on the SEC

“There’s a tremendous amount of pressure on the SEC to approve a number of these ETFs, particularly because the approved Futures backed products are lagging spot performance substantially, harming investors,” said Dave Weisberger, a markets veteran and co-founder of CoinRoutes, in a statement to Cointelegraph.

He went on to suggest that the SEC is likely to issue a blanket decision encompassing all the pending applications. Currently, the SEC is meticulously examining a total of eight spot Bitcoin ETF applications, from notable finance giants like ARK Invest and 21Shares, Bitwise, BlackRock, VanEck, WisdomTree, Invesco and Galaxy Digital, Fidelity, and Valkyrie.

To put the weight of this decision in context, these firms collectively oversee more than $15 trillion in global assets.

Addressing Concerns of Market Manipulation

“The SEC’s main concern about spot crypto ETFs is the potential for market manipulation by a dominant player," explained Ruslan Lienkha, chief of markets at YouHodler.

"While the risk exists if the SEC approves the ETFs of just one or two investment funds, greenlighting all eight would significantly reduce the risk. These heavyweight firms would frequently trade against each other, balancing the market." Despite the anticipation surrounding the SEC’s decision, Bitcoin’s price has remained relatively stable, with figures hovering around the $30,000 mark.

Mauricio Di Bartolomeo, co-founder of the crypto lending platform Ledn, believes the market has already factored in the SEC's lengthy deliberation. Investors are "expecting [the SEC] to take all the time they could," he said, emphasizing the muted market expectations.

The Clock is Ticking

The SEC has a timeline to follow. The third deadline for the ARK 21Shares application is looming, set for January 2024. Valkyrie, the last applicant in the queue, has deadlines in both January and March of the upcoming year.