U.S. asset managers are hoping that the Securities and Exchange Commission (SEC) will greenlight the trading of spot bitcoin exchange-traded funds (ETFs) despite a recent bout of confusion sparked by a fake post on the agency’s social media account claiming approval.
The SEC is set to make a critical decision on Wednesday regarding the application submitted by Ark Investments and 21Shares to launch a spot bitcoin ETF.
Numerous other applications, including those from industry giants like BlackRock, Fidelity, and VanEck, are currently pending with the regulatory body.
The potential approval of these ETFs holds significant implications for the crypto landscape, providing institutional and retail investors with exposure to the world’s largest cryptocurrency without direct ownership.
Such a development could be a game-changer for an industry grappling with scandals.
Industry insiders, who wished to remain anonymous due to the private nature of the discussions, expressed confidence earlier this week that the SEC would likely approve the Ark/21Shares product and others.
However, the SEC has maintained silence on its decision, with a spokesperson emphasizing the agency’s inability to comment on ongoing applications.
A surprising turn occurred on Tuesday evening when an unknown entity posted on the SEC’s X account that all the proposed products had received approval.
The SEC swiftly disavowed and deleted the post, attributing the incident to a compromise of their account by an “unidentified individual” who gained control of a linked phone number through a third party.
Despite the apparent hack causing a stir, industry sources believe it won’t disrupt the approval process.
Issuers disclosed their planned ETF fees this week, typically one of the final steps before a launch. At least three firms were preparing to file requests for SEC approval to launch their products on Thursday.
Josh Gilbert, a market analyst at eToro, acknowledged the impact of Tuesday’s hack on the Bitcoin market but highlighted that all indications point to the SEC moving forward with approvals.
Standard Chartered analysts projected significant inflows, estimating the ETFs could attract $50 billion to $100 billion this year, potentially driving Bitcoin’s price to $100,000.
While a positive decision from the SEC would mark a shift from a decade-long resistance to bitcoin ETFs, some investor advocates, including SEC Chair Gary Gensler, have raised concerns about the cryptocurrency’s maturity and the associated risks.
Gensler recently cautioned on his personal account that crypto asset investments “can be exceptionally risky,” emphasizing the need for prudence in this evolving financial landscape.
Despite the uncertainties, the potential approval of bitcoin ETFs is seen as a significant step toward the institutionalization and legitimization of the cryptocurrency.
Source: coinspeaker.com
