08/21 update below. This post was originally published on August 20
Bitcoin and other major cryptocurrencies, including ethereum and XRPXRP, suffered a sudden price crash this week following a stark crypto warning.
The bitcoin price had rocketed into 2023 but has seen its rally stall as traders fret the Federal Reserve could be about to stage the “greatest rug pull ever.”
Now, after the U.S. Securities and Exchange Commission (SEC) delayed its decision on a closely-watched spot bitcoin exchange-traded fund (ETF) application by Cathie Wood’s Ark Invest, the bitcoin and crypto market is braced for a flurry of SEC spot bitcoin ETF decisions, led by the world’s largest asset manager BlackRock.
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“A U.S.-listed [spot] bitcoin ETF could be meaningful as it would also be associated with a significant market push that could benefit the asset class,” Markus Thielen, head of research at Matrixport, wrote in an emailed note.
The SEC is slated to make an “approve,” “deny,” or “delay” decision on at least five spot bitcoin ETF bids in early September from asset managers that look after a combined $15.5 trillion. A decision on BlackRock’s game-changing June spot bitcoin ETF filing is due just a day later, alongside bids from Fidelity, VanEck, WisdomTree and Invesco and crypto asset manager Grayscale.
“Investors are eagerly awaiting the SEC’s verdict on the Grayscale ETF and Blackrock applications in September,” James Butterfill, CoinShares’ head of research, wrote in a wide-ranging blog post. “Anticipations are that decisions on both applications might be postponed, potentially leading to investor disappointment.”
08/21 update: Empowered Funds, part of Alpha Architect, has filed to launch three bitcoin futures ETFs amid warnings a fully-fledged U.S. spot bitcoin ETF could be hard to come by, it was reported by the Financial Times.
“While current news has revolved around spot bitcoin ETF filings, realistically there may still be a long time to approval,” Roxanna Islam, associate director of research at VettaFi, told the FT. “It seems that Ark is trying to make use of current resources and continue to expand its current line-up of crypto funds, while keeping its eye on the goal of a spot bitcoin ETF.”
Empowered’s funds will use the Ark Invest and 21Shares brands in their names.
This week, Europe’s inaugural spot bitcoin ETF, managed by London-based Jacobi Asset Management, went live on Euronext Amsterdam after it won approval from the Guernsey Financial Services Commission (GFSC) in October 2021.
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“More ETFs will bring more liquidity to the crypto market and will stimulate market growth,” Ruslan Lienkha, chief of markets at YouHodler, said in emailed comments. “Also, crypto will be better integrated into the financial system. Investors will have a wider variety of investment instruments available for portfolio diversification.”
However, the bitcoin, ethereum, XRP and broader crypto market pull-back over the last month has been interpreted by some that an imminent U.S. spot bitcoin ETF approval is looking increasingly unlikely.
“The surge in June, spurred by BlackRock’sBLK application for SEC approval of a bitcoinBTC ETF, led to a noticeable spike in prices,” Butterfill wrote. “However, markets are now coming to terms with the realization that an immediate SEC approval for a bitcoin ETF in the U.S. is unlikely. It’s noteworthy that current bitcoin prices have stabilized around levels observed before this announcement.”
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