The cryptocurrency sector is currently engulfed in heightened anticipation regarding an imminent Bitcoin ETF launch. This is due to the U.S. Securities and Exchange Commission (SEC) approaching a pivotal decision on the approval of a physically-backed Bitcoin exchange-traded fund (ETF). This decision, expected next month, is seen as a critical juncture for the integration of cryptocurrencies into mainstream finance.
Nate Geraci, a notable analyst, recently weighed in on the potential market consequences if the SEC decides against approving the ETF. He warned of a substantial market downturn, cautioning that if the spot bitcoin ETF is not approved in January, it could lead to one of the most significant setbacks in the history of cryptocurrency. Nonetheless, Geraci maintains a high level of optimism regarding the likelihood of approval, estimating it to be close to 100%.
Earlier, Geraci had speculated on JPMorgan’s potential involvement in a spot Bitcoin ETF. This followed JP Morgan CEO Jamie Dimon’s critical stance on cryptocurrencies, which he views as a tool for legal activities. He tweeted on December 7 about the possibility of JPMorgan launching such an ETF or facilitating Bitcoin investments for asset management clients, acknowledging the growing institutional and family office interest in Bitcoin.
As of now, the cryptocurrency community is eagerly awaiting January 10, a date set for the SEC to decide on an application by Cathie Wood’s ARK Investment and 21Shares, along with other similar filings. Over 10 companies are vying for approval of ETFs that would directly hold Bitcoin. Approval would signify a major milestone for the digital assets industry, especially in the wake of the FTX exchange collapse in 2022.
The launch of such a fund is expected to facilitate the integration of digital assets into traditional finance, with Bloomberg Intelligence predicting the spot-Bitcoin ETF market could grow to a $100 billion industry. Despite the optimism, regulatory challenges remain, particularly around the issue of in-kind versus cash redemptions for the ETFs. The SEC is unlikely to permit in-kind redemptions involving Bitcoin, leading to ongoing negotiations with issuers to resolve this issue.
Despite the challenges, the overall stance regarding the issue seems positive. In a recent interview, Jan3 CEO Samson Mow predicted a swift surge in Bitcoin’s value to $1 million, contingent on the approval of a spot BTC ETF. He linked this potential rise to the influx of institutional capital and the limited supply of Bitcoin available on exchanges.
