In November 2021, the price of the volatile bitcoin reached an all-time high of $69,000, thanks in part to the approval of the first bitcoin futures ETF in October 2021. While futures-based ETFs monitor the price of bitcoin futures contracts, spot ETFs track the price of the cryptocurrency immediately. In four to six months, the SEC might approve a spot bitcoin exchange-traded fund (ETF), according to Galaxy Digital CEO Mike Novogratz. The CEO mentioned his connections at Invesco and Blackrock, the two biggest asset managers in the world. The SEC has received applications from both businesses to start a Bitcoin ETF.
What is a Spot Bitcoin ETF?
A sort of investment known as an exchange-traded fund (ETF) monitors a particular asset or commodity, in this case, bitcoin. ETFs can be bought and sold on stock exchanges and through brokerage accounts, with the ETF manager maintaining custody of the underlying asset. This enables investors to access the Bitcoin price without having to worry about maintaining their custody of the currency or learning how to use a Bitcoin exchange. Since customers could buy shares of a spot bitcoin ETF directly through their accustomed brokerage accounts, this might provide traditional investors with peace of mind.
ETF Approval is the biggest of deals for Mike Novogratz
The U.S. Securities and Exchange Commission (SEC) could approve a spot bitcoin exchange-traded fund (ETF) within four to six months, according to Mike Novogratz, CEO of Galaxy Digital Holdings, who announced his company’s Q2 earnings call on Tuesday.
Regarding the possibility that the SEC will approve Blackrock and Invesco’s spot bitcoin ETF filings, Novogratz stated that out of the two, both of his contacts—from the Blackrock and Invesco sides—will lead to believe that the potential window is most likely six months and that the question is when not if.
Further Developments as ETF Approval is Awaited
Blackrock submitted a filing in June to start a spot Bitcoin Trust ETF. According to Blackrock CEO Larry Fink, the asset manager wants to democratise cryptocurrency. Cryptocurrencies, in his opinion, will “transcend any one currency.” Numerous applications for spot bitcoin ETFs have already been turned down by the SEC because they didn’t adhere to criteria for investor protection and anti-fraud.
Nevertheless, Nasdaq (NDAQ.O), where BlackRock sought to launch its ETF, stated earlier this month that it would allay those worries by coordinating with Coinbase, the biggest crypto exchange based in the United States, to regulate trading in the underlying market of bitcoin. A comparable surveillance system was also proposed in previous filings by CBOE Global Markets (CBOE.Z).
Likelihood of Spot Bitcoin ETF Approval
On Tuesday’s results call, Novogratz added: “It’s noteworthy that Larry Fink, who heads Blackrock, which manages $7 trillion in assets, is gone after being orange peeled and talking very positively about bitcoin and the cryptocurrency world, including bitcoin as the first global money.” That represents a significant shift in perspective from where he was, where the institutional world was, five or six years ago. Novogratz stated that once they acquire this ETF, it will be quite simple for investors to make sizable investments in the sector.
Invesco, along with Galaxy Digital, in September of last year, gave investors access to a variety of products in the ecosystem for digital assets. According to Bloomberg experts who specialise in ETFs, the possibility that the SEC would approve a spot bitcoin ETF in the United States has increased to 65%.
In addition, Novogratz said that he believed the Ripple decision would pressurise Democrats to come up to the table, go head-on with the Republicans and produce some legislation that could provide clarity. The SEC informed Judge Torres on Wednesday that it intended to appeal her decision in the SEC v. Ripple lawsuit concerning XRP. The securities regulator also requests a court case be postponed.