Wall Street Giants Not Left Out of SEC Decision on Bitcoin ETFs

Crypto ETFs in the United States

The Securities and Exchange Commission’s (SEC) delay in deciding whether to approve a spot Bitcoin (BTC) exchange-traded fund (ETF) in the United States is increasing anticipation that a final verdict will come in a batch that includes major players on Wall Street, such as BlackRock and Fidelity.

“There’s a great deal of pressure on the SEC to approve several of these ETFs, especially since the approved Futures backed products are lagging spot performance significantly, hurting investors,” said CoinRoutes co-founder Dave Weisberger to Cointelegraph, adding that all pending applications will probably be included in a final decision.

The SEC is currently examining a total of eight applications for a spot Bitcoin ETF, after past delays and rejections of the crypto product in recent years. Companies up for a decision are Ark and 21Shares, Bitwise, BlackRock, VanEck, WisdomTree, Invesco and Galaxy Digital, Fidelity, and Valkyrie. These firms together manage over $15 trillion in global assets.

On Aug. 11, the U.S. markets regulator opened a 21-day comment period for the ARK 21Shares Bitcoin ETF. As per the filing, the SEC is seeking answers on whether ARK 21Shares’ proposal is designed to prevent fraudulent and manipulative acts and practices, as well as whether the Bitcoin market is vulnerable to manipulation.

SEC’s Concerns on Crypto ETFs

The SEC recently raised concerns about Coinbase’s surveillance-sharing agreement, questioning whether Coinbase’s involvement in the ETFs surveillance would help detect, investigate, and deter fraud and manipulation in the Bitcoin’s price.

“The SEC’s primary worry about spot crypto ETFs is about the potential market manipulation by a big whale. If the SEC approves only one or two investment funds’ ETFs, this risk is higher, but if it decides to register all 8 ETFs, this risk is greatly reduced, as these firms will be able to trade with each other frequently, taking opposite sides,” explained Ruslan Lienkha, chief of markets at YouHodler.

The delay had a minimal effect on Bitcoin’s price, which was hovering around the $30,000-mark at the time of writing. Mauricio Di Bartolomeo, co-founder of crypto lending platform Ledn, mentioned that traders and investors are “expecting them [the SEC] to take all the time they could,” and that today’s decision had a low impact “in terms of market expectations.”

The SEC still has two deadlines before a final decision is made. ARK 21Shares’ application is due by January 202, while Valkyrie’s application has two upcoming deadlines in January and March next year.

The potential outcome of a BTC ETF could transform the crypto investing landscape. According to Lienkha, if approved, it could bring about $70 billion of liquidity into the Bitcoin market. He pointed out that investing in Bitcoin through ETFs would give ordinary investors more assurance, since they can rely on professional help and don’t have to personally analyze all the technical aspects and potential risks.