The U.S. Securities and Exchange Commission (SEC) is currently reviewing over six spot Bitcoin exchange-traded fund (ETF) applications from major financial firms. BlackRock, WisdomTree, VanEck, Fidelity, Invesco Galaxy, and Valkyrie are among the applicants seeking SEC approval to launch ETFs that will allow customers to invest in Bitcoin indirectly through traditional stock markets.
The SEC has previously rejected several Bitcoin ETF proposals due to concerns about potential market manipulation, fraud, and investor protection. However, the regulator recently approved a Bitcoin futures ETF. It tracks the price of Bitcoin futures contracts instead of the spot price of the cryptocurrency.
To address the SEC’s concerns, some of the applicants have included a “surveillance-sharing” agreement with a leading U.S. crypto exchange in their updated applications. This agreement means they will share trading activity and suspicious transaction information with the exchange to prevent market manipulation.
The SEC has a maximum of 45 days to approve or reject the ETF applications, but it can extend the review period for up to 240 days if needed. If approved, these spot Bitcoin ETFs could significantly boost demand and liquidity for Bitcoin while also lowering barriers for both institutional and retail investors to enter the crypto market.
Bitcoin Remains Investors’ Top Choice for Growth
According to a recent survey by CoinShares, asset managers view Bitcoin as the cryptocurrency with the most compelling growth potential. Ethereum, on the other hand, continues to be the largest holding in their portfolios, although Bitcoin’s appeal has risen since the previous survey conducted in April.
The survey received responses from investors who collectively manage $750 billion in assets under management, with the majority from Europe and the Middle East and a smaller percentage from North America and Asia.
The main reason cited by 37% of respondents for investing in digital assets is the potential for growth in distributed ledger technology. Other reasons include diversification, speculation, finding good value, and meeting client demand.
Regulatory Concerns and Shifting Sentiments Impact Crypto Investments
Despite the positive outlook, respondents in the survey also highlighted regulatory risks and the possibility of government bans as key concerns for the cryptocurrency market. The regulatory crackdown on the crypto space has sparked worries about future growth prospects.
However, some argue that clear regulations could benefit the industry by eliminating bad actors.
In recent months, asset managers have reduced their allocation to digital assets in their portfolios from 1.8% in April to 0.7% by the end of June. The increased scrutiny from the SEC has contributed to more than $400 million in outflows during the first half of 2023.
However, the sentiment seems to be shifting with a resurgence of interest in the crypto market. The market saw a $470 million inflow in the three weeks leading up to July 14, triggered by BlackRock’s application for a Bitcoin ETF. This sparked a race among asset managers to be the first to launch a U.S. spot Bitcoin ETF, pushing the price of Bitcoin to $31,840 from $25,000 in mid-June. As of Friday afternoon, the token’s value stood at around $30,000, reflecting a 75.6% year-to-date increase.
Bullish Resumption for Bitcoin?
Speaking of which, BTC appears to have lost steam around the $30,400 mark, with the benchmark cryptocurrency seemingly unable to proceed any further despite several attempts.
Meanwhile, despite the significant drop in volatility, a golden cross formation appears to be emerging, and we could see one this week. In this case, we can expect Bitcoin to record renewed bullish momentum and take another swing at a comfortable and sustained close above the $31,000 mark.
BTC Statistics Data
Current BTC Price: $30,055
Market Cap: $584B
BTC Circulating Supply: 19.4M
BTC Total Supply: 21M
Market Ranking: #1
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