‘Can be banned’ or smooth sailing? Bitcoin ETF where experts can weigh in

Many are wondering if the United States Securities and Exchange Commission will rule on exchanges that list Bitcoin (BTC) exchange-traded funds (ETF) ahead of the January 10 deadline.

At the time of publication, the SEC has not announced whether it plans to approve or reject BTC exchange-traded product applications for multiple positions in the pipeline. The commission has until January 10 to reject or approve the Bitcoin ETF shares from ARK Invest and 21Shares. Analysts speculate that if the SEC were to approve one crypto investment vehicle, it could approve many.

A Jan. 3 report by 10x Research's Marcus Thielen found that ETF applicants did not meet the necessary requirements for SEC approval despite strong trends in Bitcoin's price. The research paper was released amid reports that the SEC plans to hold meetings with major exchanges to finalize comments on applications by spot crypto ETF issuers.

“The current one-sided market consensus is that the SEC is awaiting approval of Bitcoin Spot ETFs next week,” Thielen said. “But we see an opportunity to trade with consensus, which has significant price implications, emphasizing the risk of placing ahead of events.”

He added:

“While frequent meetings between EFF applicants and SEC staff have led to returned applications, we take the opposite view that all proposals fall short of critical requirements for SEC approval, which is likely to be rejected in January.”

My report is not based on issuer or SEC insider opinions. This is clearly out of agreement. I think the SEC will downgrade the selection. And yes, after being the biggest bull for the whole year (predicted 45k on 1st february xmas) I turned bearish today but the arguments were ready

— Marcus Thielen (@thielen10x) January 3, 2024

Other analysts expect the SEC to approve the offer from ARK Investments and others within the next 10 days, based on meetings with exchange representatives and legal precedent. In October, the commission was forced to revisit an application for a Bitcoin ETF from Greyscale Investments, saying the judge's decision to reject the offering was “arbitrary and frivolous.”

“I expect multiple approvals on January 10,” Ludlow Street Advisors founder James Murphy said on X. [for potential rejection] Excuse me, deny it and I think sanctions against SEC attorneys may be in play.

Related: Spot Bitcoin ETF Could Be Rejected If SEC Wants ‘More Time' – Analyst

Despite numerous applications from asset managers over the years, the SEC has never approved a BTC exchange to list and trade on a US exchange. In June 2023, BlackRock – the world's largest asset management company – applied for a Bitcoin ETF in the United States, renewing interest in the investment vehicle and leading to speculation that the Commission should act.

Thielen, also an analyst at the crypto trading platform Matrixport, claimed that the SEC “does not accept” the position of the Bitcoin ETF. He wrote a report on January 2. After the report was circulated on various social media platforms and news outlets, Matrixport founder Wu Jihan said on X that it was intended for the company's customers rather than the media.

Magazine: BlackRock Meets SEC Over ETF, Binance's New Era Begins, and SBF Wins Divestment Bid: Hodler Digest, November 19–25