The long wait for a spot bitcoin exchange-traded fund (ETF) in the U.S. may soon be over. Grayscale CEO Michael Sonnenshein said the company is "ready for the main event" after winning a lawsuit against the SEC.
The regulatory agency now has a brief window to approve spot bitcoin ETFs this week, though analysts believe an approval is more likely in early 2024.
Keypoints
- Grayscale CEO says they are ready for a spot Bitcoin ETF approval after winning lawsuit against SEC
- Window of opportunity open for SEC to approve spot Bitcoin ETFs this week, though approval more likely in early 2023
- Spot Bitcoin ETFs expected to introduce crypto to broader investor base like retirement funds and RIAs
- Coinbase report says spot ETFs will improve liquidity, price discovery, open door to new products
- Bitcoin seen as attractive safe haven asset heading into 2024 amid geopolitical and economic uncertainty
Grayscale filed a lawsuit against the SEC in June after its spot bitcoin ETF application was denied. The company won the case, and the SEC decided not to appeal. Now, the U.S. Court of Appeals has mandated the SEC re-review Grayscale's application. Approval seems imminent, with Grayscale's chief legal officer saying it's a matter of "when, not if."
The potential approval of spot bitcoin ETFs is significant because they are expected to open crypto markets to a broader investor base. As Coinbase highlighted in a new report, spot ETFs would allow registered investment advisors (RIAs), retirement funds, and institutions to access crypto for the first time. This new capital could add billions to the total crypto market cap.
Beyond new money, spot ETFs are seen improving overall market infrastructure. Coinbase said they will "ease restrictions for large money managers and institutions to buy and hold bitcoin." This could multiply existing crypto products for accredited investors. ETFs are also expected to boost liquidity and price discovery as mainstream investors enter.
With geopolitical and economic uncertainty rising, bitcoin's safe haven narrative strengthens heading into 2024. As Coinbase noted, alternatives like Treasuries have faltered while systemic banking risks remain. This makes bitcoin more attractive as an alternative asset and store of value. The incoming spot ETFs will focus more institutional attention on bitcoin at an opportune time.
The long-awaited spot bitcoin ETFs could get SEC approval within months. This would introduce mainstream investors to crypto, improving market infrastructure and cementing bitcoin's status as a digital store of value.
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