T

he long-awaited approval of a Bitcoin ETF by the SEC seems closer to reality heading into 2024, with key regulatory decisions expected in January. Here's a breakdown of what crypto investors can expect.

The Sec Logo
The Sec Logo

Earlier-Than-Expected Comment Periods Signal Accelerated Timeline

In a surprising move, the SEC initiated public comment periods for the Franklin Templeton and Hashdex bitcoin ETF applications earlier than their required deadlines. Typically the SEC takes the full 240 days to review filings, but opening comments now implies they may approve one or both funds more quickly. 

Some analysts think the SEC is preparing to approve multiple applications simultaneously by January 10th to avoid any single firm gaining too much of an advantage. Initiating early review gets all applicants on the same potential approval schedule.

Franklin Templeton ETF Filing Specifically Called Out

As one of the largest asset managers with over $1.5 trillion AUM, Franklin Templeton submitted their spot bitcoin ETF filing in October. However, it faced an unexpected delay on November 15th that has since been resolved. 

On November 29th, Franklin Templeton amended their prospectus to address SEC questions, signaling their application has been responsive to regulatory concerns. As a blue-chip firm with extensive experience, Franklin Templeton is seen as a likely early candidate for approval.

Optimism from Past SEC Communications 

Since losing a prominent lawsuit to Grayscale Investments in August forcing more transparent communication, the SEC began more constructive dialog with firms exploring a spot bitcoin ETF.

Dozens of meetings were held to better understand how regulated crypto investment products could operate.

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Comments from SEC leadership suggest they now see the value of a spot bitcoin ETF if structural issues around market manipulation can be resolved. As more vetted applications accumulate, the regulatory landscape looks more conducive for a breakthrough.

Predictions of Simultaneous Multiple Approvals

Given the extensive dialog and number of qualified filings, many believe the SEC will approve two or more spot bitcoin ETFs simultaneously in January rather than accept any single firm's product. This would avoid claims of preferential treatment or solely relying on any one firm's capabilities and internal controls. 

Major players like Fidelity, VanEck and Valkyrie are thought to have sufficient infrastructure for consolidated approval. As deadlines near, the coming months could finally open the floodgates on institutional bitcoin investment through regulated ETF vehicles

January looks primed to be a pivotal month for US cryptocurrency regulation as multiple quality spot bitcoin ETF applications could gain approval from the SEC. Positive communications and accelerated timelines indicate a breakthrough may be close at hand to welcome this long-awaited product class. Investors are closely watching for further developments.

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