January 4, 2024 at 09:07 GMTModified date: January 4, 2024 at 09:07 GMT
January 4, 2024 at 09:07 GMT

Anticipation builds for spot BTC ETF approval in the US

Many market commentators have been rooting for a possible approval of a spot BTC ETF in the coming weeks.

Anticipation builds for spot BTC ETF approval in the US

Cryptocurrency market has been riding on the back of an imminent approval of spot Bitcoin exchange-traded fund (ETF) in the new year. This anticipation has already had a significant impact, propelling Bitcoin to price levels not seen since April 2022.

As per multiple reports, the US Securities and Exchange Commission (SEC) might begin approving Bitcoin ETF applications as early as this week. This move would mark a significant shift in the cryptocurrency landscape.

Currently, the SEC has 14 spot Bitcoin ETF applications on its desk, including submissions from industry heavyweights like BlackRock, WisdomTree, and Valkyrie.

In an effort to bolster their chances of approval, many of these firms have amended their filings. This involved enhancing compliance measures such as anti-money laundering protocols and implementing comprehensive Know Your Customer (KYC) processes.

A shift in market sentiment

Many in the cryptocurrency community are now quite optimistic about the potential approval of these ETFs. 

Notably, market commentator Jim Cramer recently pulled a u-turn in his stance. He has historically been bearish on crypto investments, especially during the 2022 bear market collapse.

In a recent interview with CNBC, Cramer highlighted the resilience of Bitcoin, remarking, “This thing, you can’t kill it.” He went on to praise the top coin as a “technological marvel”, asserting its merit as a lasting element in the financial landscape.

Gearing up for the ETF

Adding to this bullish sentiment is the news from MicroStrategy. The company’s executive chairman, Michael Saylor, has initiated the process of selling $216 million worth of his shares in the firm. 

This move, aimed at addressing personal obligations and increasing his Bitcoin holdings, began on 2 January with the sale of 5,000 shares from his stock options awarded in April 2014.

In November, Saylor had indicated his intention to sell MSTR shares to “acquire additional Bitcoin to my personal account”.

Following this, MicroStrategy announced the purchase of an additional 14,620 Bitcoin for $615 million in December. This brought its total holdings to an impressive 189,150 $BTC, valued at around $8.5 billion.

Betting on the coming weeks

The Chicago Board Options Exchange (CBOE) is among those predicting a positive outcome for the spot Bitcoin ETFs, with a key SEC decision expected next week. 

The SEC’s deadline for the ARK Invest – 21 Shares Bitcoin ETF application is 10 January. John Palmer, president of CBOE Digital, anticipates an increase in Bitcoin derivatives following a potential approval, which could attract pension and RIA-based funds into Bitcoin.

CBOE Digital is also preparing to launch Bitcoin and Ether derivatives trading on 11 January, allowing trading without full collateral. Additionally, mutual funds like Advisors Preferred Trust are gearing up to invest in Bitcoin ETFs and related products too.

Decentralised prediction platform Polymarket is also showing confidence in the approval of one or more Bitcoin ETFs in the US within the next two weeks. The platform allows investors to place bets on various events. 

Currently, the “Bitcoin ETF approved by Jan 15” contract is trading at 89 cents, suggesting an 89% probability of approval by mid-January, a significant increase from the 50% probability seen a month ago.