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The crypto sector might see some respite regarding spot Bitcoin ETF approvals as the SEC could begin to approve them by next year.
According to a pair of Bloomberg analysts, the Securities and Exchange Commission (SEC) could greenlight spot a spot Bitcoin (BTC) exchange-traded fund (ETF) by 2023. Eric Balchunas and James Seyffart made this assertion, saying that a proposed rule change with the Commission could result in the aforementioned approvals.
Balchunas put out a statement on Twitter to shed light on the SEC’s intention to change the definition of “exchange”. According to Balchunas, crypto platforms would fall under the SEC’s regulatory framework if the commission approves the amendment. Balchunas’ tweet read:
“New note out on why we think spot bitcoin ETFs will get approved in early Summer 2023. The SEC is proposing to expand the definition of “exchange” which would bring crypto platforms under SEC reg. After that (which could take a year) look for ETFs to get green light via JSeyff.”
As posited by the rule change, platforms “that make available for trading any type of security” will join others regulated by the SEC. All evidence suggests that digital currencies will be a big part of the development. When this happens, the Commission would be more inclined to approvals. According to the Bloomberg analysts, “once crypto exchanges are compliant, the SEC’s primary reason for denying spot Bitcoin ETFs would no longer be valid, likely clearing the way for approval.”
BTC ETF to Be One of Biggest Beneficiaries of SEC’s Proposed Amendment
Balchunas and Seyffart particularly highlighted spot crypto ETFs, especially those pertaining to BTC, as a prime beneficiary of the proposed amendment. This is because so far, the regulatory agency has rejected all rule changes seeking BTC ETF listings. Some of the more recent denials include the applications of the New York Digital Investment Group (NYDIG) and fund manager Global X. Meanwhile, in that same time frame, the SEC has approved some investment products tied to BTC futures. In fact, back in October 2021, Balchunas went on record to suggest that futures-based BTC ETFs had a 75% chance of approval.
The SEC’s perceived apathy in approving spot BTC ETFs has not gone over well with several US lawmakers and industry leaders. Back in November last year, Representatives Tom Emmer and Darren Soto sent a letter to the regulatory agency. In the letter, the Federal lawmakers challenged SEC Chair Gary Gensler about the bureau’s refusal to approve spot BTC ETFs.
During a hearing in December last year, Bitfury CEO and former Acting Comptroller of the Currency Brian Brooks also discussed the situation. Brooks suggested that the current spot BTC ETF bottleneck was direct because of the United States government’s actions – or lack thereof.
What Is a Spot Bitcoin ETF?
A spot BTC ETF is an investment vehicle that grants investors direct exposure to the digital currency. Here, investors can directly own, buy, sell and hold BTC in the hopes that its value will go up.