There is a wave of optimism surrounding the potential approval of a spot Bitcoin exchange-traded fund (ETF) in the United States, which has sparked bullish price action in the crypto market in recent weeks.
If a spot Bitcoin (BTC) ETF is approved by the U.S. Securities and Exchange Commission, it would be a significant milestone in the history of digital assets, providing institutional investors with a simple and regulated way to gain exposure to Bitcoin, potentially leading to major consequences for the market.
Many analysts believe that a spot Bitcoin ETF could create a demand shock that, combined with next year’s Bitcoin halving event, could trigger a new crypto bull market.
While the SEC has previously rejected all applications, the current batch of applications is different for two main reasons. One reason is the involvement of BlackRock, the world’s largest asset manager, which filed for a spot Bitcoin ETF earlier this year. The second reason is a court ruling that required the SEC to reconsider a previous rejection of Grayscale’s application, calling the regulator’s process “arbitrary and capricious.”
“The Grayscale decision ultimately says that you can’t allow Bitcoin futures ETFs to trade and then argue that the same situation is not for spot Bitcoin ETFs,” said James Seyffart, an analyst at Bloomberg Intelligence. As a result, Seyffart believes the odds of approval by early January are 90%.
To understand the potential impact of a spot Bitcoin ETF approval on the market, check out the full Cointelegraph Report on YouTube and subscribe for more information.