The cryptocurrency market remains a focal point of attention due to speculation about the potential approval of a spot Bitcoin Exchange Traded Fund (ETF) by the Securities Exchange Commission (SEC). As anticipation builds, various industry experts have made predictions, offering different timelines for when the product might receive approval.
In this line, Neel Maitra, a partner at Wilson Sonsini and former member of the SEC chairman Gary Gensler’s crypto division, has offered a prediction noting that the spot Bitcoin ETF could become a reality in months, Benzinga reported on October 27.
He highlighted a significant factor favoring a spot Bitcoin ETF approval: the strong correlation between Bitcoin futures and the spot market. This connection suggests that concerns over potential market manipulation may be overstated, a crucial argument against approving a spot ETF.
“At a high level, it does seem that a spot BTC ETF is something that could indeed be approved and be trading in a matter of months,” he said.
SEC’s potential embrace of the crypto sector
In his view, the possible approval of a spot Bitcoin ETF aligns with the growing sentiment in the crypto industry that the SEC is warming up to embracing digital assets and related financial products.
Indeed, the speculation regarding the ETF topic has been rekindled following years of the SEC’s consistent rejection of applications. Notably, the SEC recently faced a setback when a judge ruled that the regulatory body had no valid grounds to reject the application by crypto-focused asset manager Grayscale, seeking to transform its GBTC Bitcoin fund into an ETF.
Anticipation has risen since the SEC chose not to appeal this decision, potentially clearing the path for the product’s approval. The judge’s decision hinged on the SEC’s prior approval of a Bitcoin futures ETF in 2021. At that time, Chair Gensler argued that the futures market offered more inherent protections for investors compared to the spot market.
The surge in enthusiasm can also be traced back to including BlackRock’s (NYSE: BLK) Bitcoin ETF in a list overseen by the Depository Trust and Clearing Corp, a clearinghouse associated with Nasdaq responsible for managing stocks and ETFs.
Significance of spot ETF in crypto
The prospect of a Bitcoin ETF gaining approval has sparked considerable enthusiasm, primarily driven by its potential to lure institutional investors into the cryptocurrency space while offering them a regulated and more easily accessible path for Bitcoin investments.
It is essential to bear in mind that, despite the mounting optimism surrounding the green light for a Bitcoin ETF, the final decision by the SEC remains uncertain. Historically, the SEC has exhibited caution in handling cryptocurrency-related financial products, citing concerns such as market manipulation and the safeguarding of investor interests.
In the meantime, Bitcoin continues to target the $35,000 level after gaining by over 15% in a week following the ETF speculation.
