Friday, 15 October 2021 05:30

First U.S. Bitcoin ETF Could Be Approved In October – Here’s Why

A growing number of investment funds have applied for Bitcoin ETFs in the U.S. under the SEC, as interest in crypto has been on the rise in recently. Some countries so far have approved crypto ETFs and investors can trade on these. However, the United States is yet to see the approval of its very first bitcoin ETF, but we might be very close for that to happen.

There has been an increasing amount of speculations around the subject of approval of a bitcoin ETF in the US. The Securities and Exchange Commission (SEC) was expected to make a ruling on various Bitcoin ETFs that had been filed. But the regulator had moved up the date.

SEC Stance On Crypto

SEC Chairman Gary Gensler announced that the regulatory body had no intention of banning bitcoin in the United States, which led an increasing number of investors began to expect the approval of a bitcoin ETF closing in. The reasoning behind this being that the chairman would not likely go out of his way to provide information like this if there wasn’t good news in the future.

Many believe that we October will see the approval of the first bitcoin ETF in the US, which would enable investors to begin trading on Bitcoin Futures ETFs. Instead of having to trade on Canadian crypto ETFs.

Also, Canadian mutual fund with the same language as a bitcoin ETF had been previously approved by the regulation. This was put forward by asset manager James Seyffart, who thinks that since the SEC had approved this mutual fund, then it would most likely approve an ETF that consisted of similar wording.

The 2nd is that Gensler was pretty damn explicit in his August 3rd comments that started this part of the Bitcoin ETF race — about being "limited to CME bitcoin Futures". But i honestly feel like we're trying to read the tea leaves like people read the Fed minutes. Who knows 4/x— James Seyffart (@JSeyff) October 8, 2021

Speculation on the Bitcoin ETF Approval

Eric Balchunas, an ETF analyst for Bloomberg, tweeted on some signals that point to the way that the first bitcoin ETF is close to being approved. He said that Valkyrie, a digital asset management firm, had updated their Bitcoin Futures ETF prospectus.

NOTABLE: Valkyrie just updated their bitcoin futures ETF prospectus (which typically only happens when ducks in row ready for launch). They added their ticker $BTF, altho no fee still. Can't say this is done deal type evidence but a good sign IMO. — Eric Balchunas (@EricBalchunas) October 13, 2021

This is very interesting because, an update to a prospectus is only required when the regulators are close to approving it and the firm needs to make sure that the document contains the correct information. In addition to this update, Valkyrie had also updated added their ticker ($BTF) to the document.

Balchunas points out that while this is a good sign, it does not really mean that a bitcoin ETF is going to be approved. It means that the firms who submitted these ETFs are moving in the right direction towards getting approval. However, every launch is usually preceded by an update. “That’s what happens right before a launch, they fill in all the XXs and add ticker,” Balchunas said.

But, interestingly U.S. Securities and Exchange Commission’s Office of Investor Education and Advocacy tweeted something that could well be considered another hint towards ETFs coming soon. The tweet read: “Before investing in a fund that holds Bitcoin futures contracts, make sure you carefully weigh the potential risks and benefits.”

Before investing in a fund that holds Bitcoin futures contracts, make sure you carefully weigh the potential risks and benefits.

Check out our Investor Bulletin to learn more: — SEC Investor Ed (@SEC_Investor_Ed) October 14, 2021


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