This is the third version of this headline I've published in this newsletter. And the answer may finally be yes: A spot bitcoin exchange-traded fund (ETF) may begin trading in the U.S. in the coming weeks.

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Excitement over a spot bitcoin ETF a regulated financial product that would give institutional and retail investors easier exposure to bitcoin's price without requiring them to invest directly in the asset continues to grow.

The U.S. Securities and Exchange Commission (SEC) faces a Jan. 10 deadline for approving an application from Ark 21 Shares. It's widely seen as the final date by which the SEC may approve or reject the more than a dozen outstanding applications.

A number of signs point to an approval in the near future like continued meetings between SEC staff, exchanges and would-be issuers, as well as a flurry of filings.

SEC staff met with representatives from the markets that want to list the products the New York Stock Exchange, Nasdaq and Cboe Global Markets on Wednesday afternoon, an individual told CoinDesk.

Fox Business first reported that the meetings were taking place, saying SEC attorneys from the Division of Trading and Markets met with representatives from the exchanges.

Over the past few weeks, SEC staff have also met with issuers to address various aspects of their S-1 filings, including having all issuers use a cash creation and redemption model instead of in-kind.

Cash creation means what it sounds like: Authorized participants will purchase shares of the ETFs from the issuers using cash, rather than directly acquiring the underlying asset.

Companies like BlackRock and Grayscale have argued before the SEC that the regulator should be comfortable with and allow in-kind creation. Georgetown University Associate Professor James Angel similarly argued in a letter to the regulator that only allowing cash creation would end up adding fees and other frictions to the various parties.

An individual familiar with an issuer's efforts told CoinDesk last month that issuers had been meeting with the SEC to pitch the regulator on allowing both cash and in-kind creations.

"If you offer cash and in-kind, you have more market participants, tighter spreads on the ETF, closer tracking to the underlying assets and greater investor protections," the individual said.

However, the individual also noted that there may be a few reasons why the SEC may not want to allow in-kind creations at this moment simply due to how existing rules are structured.

The SEC may need to update its rules for how broker-dealers handle custody transactions before it can allow in-kind, the person suggested as one possible reason for the reticence.

"I think many of the issuers believe that they don't want the introduction of a bitcoin ETF to be the thing that forces the SEC to update the rules and regulations for how broker-dealers handle bitcoin," they said. This isn't an insurmountable problem the SEC could allow other intermediary businesses handle trading for in-kind creations and redemptions, for example.

Also on Wednesday, Fidelity filed a form 8-A, which allows exchanges to list shares. While this form doesn't in and of itself mean the product has been approved, it is a procedural step that must be taken if approval does arrive. An individual at another would-be issuer said their company would also have to file a form 8-A.

James Seyffart, an analyst with Bloomberg Intelligence, said the filing is a registration that's needed for the shares to begin trading.

"What will actually dictate SEC approvals is 19b-4 and S-1 approvals," he said.

"There are two primary things that I'm watching and that others should be watching if they're interested," Seyffart said. "These ETFs need a 19b-4 approval order and they need a completed and effective prospectus, aka an S-1. Without both of those things, the ETFs cannot begin trading."

In the meantime, we have seen a number of amended filings addressing the cash creation model and naming authorized participants.

And seemingly riding on the wave of excitement, the T-REX Group (yes, really) filed for a number of inverse and long spot bitcoin ETFs, presumably in anticipation of a spot trust product approval. None of these actions are smoking guns, but they all hint at a likely approval.

If youve got thoughts or questions on what I should discuss next week or any other feedback youd like to share, feel free to email me at nik@coindesk.com or find me on Twitter @nikhileshde.

You can also join the group conversation on Telegram.

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Will 2024 Be the Year of the Bitcoin ETF? - CoinDesk

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The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.

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Bitcoin ETF Fees Will Play Critical Role in the Race to Popularity - CoinDesk

The year 2023 will be remembered as turbulent for cryptocurrencies, with numerous important developments that ultimately helped to clean up the space to potentially make it more attractive to mainstream investors. Notably there was the conviction of FTX CEO Sam Bankman-Fried for fraud.

Top exchange Binance also reached a US$4 billion settlement (3.1 billion) with the US treasury department over money-laundering charges, which saw CEO Changpeng CZ Zhao agreeing to step down and pay a US$50 million fine.

Meanwhile, regulators continued cracking down on other operators, but potentially lost one of their key cases against the industry after a US court ruled that the XRP token, one of the top ten cryptocurrencies, was not a security (meaning a tradeable financial asset like shares or bonds).

This means its creator, Ripple, did not break the law by selling it on exchanges. Viewed as a test case for the majority of cryptocurrencies, the US Securities Exchange Commission (SEC) is currently appealing.

While all this was happening, the bitcoin price rose away from the lows of late 2022. It started the year at US$16,000 and ended comfortably above the US$40,000 threshold.

So what does 2024 look like for this sector and what key events are on the horizon?

The SEC may finally be about to greenlight a type of investment vehicle known as an exchange traded fund (ETF) for the for the general or spot bitcoin market. ETFs already exist for everything from oil to the FTSE 100 to even regions and countries. They track the underlying asset, creating an easy way for people to invest without having to buy the asset directly.

Until now, the only ETFs permitted for crypto in the US have been for the futures markets. These niche markets are concerned with where investors think crypto prices are heading in future.

Bitcoin price 2021-24

A spot bitcoin ETF would likely encourage mainstream investors to buy exposure to this market, while potentially attracting banks to actively participate too. Bitcoin could be offered by financial advisors and there would no longer be a need for investors to hold the asset itself or face difficulties like crypto exchanges, coin storage and so on.

There are various reasons why many commentators think the SEC may now end its opposition to such an ETF. For one thing, the list of applicants includes Blackrock, the biggest investment house in the world, along with various other major players.

Also, digital asset group Grayscale won an important case against the SEC in 2023, which had been blocking its attempt to convert its US$17 billion bitcoin futures ETF, GBTC, into a spot version. This has forced the SEC to reconsider Grayscales application too.

Further, Hong Kongs regulatory authority has announced it is open to spot bitcoin ETF applications and has laid down guidelines permitting several varieties. As well as the basic model that we may soon see in the US, where investors would buy into bitcoin ETFs with dollars, Hong Kong is open to a second variety known as in-kind.

This would make it possible to convert shares in a bitcoin ETF into bitcoin and vice versa, allowing more flexibility and potentially attracting more institutional investors into the space.

Jerome Powell, chair of US central bank the Federal Reserve, has indicated that interest rates may have peaked, and that the Fed is likely to cut them during 2024. Similarly in the UK, leading mortgage lender Halifax has cut its lending rate in expectation of a Bank of England rate cut.

If interest rates are cut or even stabilise in 2024, it could make bitcoin (and other digital assets) more attractive to investors, since its limited supply makes it a hedge against traditional currencies losing value over time.

More generally, rate cuts prompt investors to look for higher investment returns, and cryptocurrencies have delivered here too.

Asset class returns since 2011

In addition, the US and other economies may enter a recession in the later half of 2024 due to the lagged effects of the interest rate hikes.

Equally, we saw a number of bank failures in 2023, predominantly in the US. In the event of a recession or more bank problems, governments may be forced to provide stimulus packages and print more money. This would further devalue currencies and make bitcoin still more attractive.

A big event for bitcoin in 2024 is the so-called halving. Bitcoin runs on an online ledger known as a blockchain, in which entries are validated by miners using arrays of computers to solve complex mathematical puzzles. Miners are paid in bitcoin for completing a set of transactions known as a block, and the protocol stipulates that their reward per block halves every 210,000 blocks (roughly every four years).

The reward began at 50 bitcoin in 2009 and is expected to fall from 6.25 bitcoin to 3.125 bitcoin around the middle of April 2024.

This decrease entails fewer bitcoin sold on the market, which tightens supply and may squeeze out the least efficient miners, significantly reducing the computer power used by the network. The three previous halvings have prompted dramatic bull runs, while also driving up the prices of digital assets more generally as investors take more risks in the space.

Halving effects

The bitcoin network saw a number of technological advancements in 2023. This has included enabling a new and a unique form of NFTs (non-fungible tokens) known as ordinals, and also a new standard called BRC-20 that makes it possible to create new cryptocurrencies on the network. Until now, NFTs and new cryptocurrencies have mostly been issued on other blockchains such as ethereum.

We are also seeing growing adoption of the Lightning network, a layer above the bitcoin blockchain that enables much faster transactions. All these changes are resulting in increased demand for bitcoin, which in turn may lead to higher prices.

In sum, theres a strong case for being bullish about bitcoins price in the year ahead. Commentators predictions range from US$60,000 to US$500,000 by year end. Our own belief is that though the road may be bumpy, 2024 could well see increased adoption of cryptocurrencies, which will drive prices beyond the current US$40,000 mark.

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Bitcoin: four reasons why the price should surge in 2024 - The Conversation

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Crypto Stocks Rally On Report Bitcoin ETF Regulatory Approvals Could Arrive Sooner Than Expected - Investor's Business Daily

The crypto world is betting its mainstream moment is here. That bet hinges on the blessing of Wall Streets top cop.

The Securities and Exchange Commission is expected in the coming days to rule on whether 14 different money managers will be allowed to launch their own spot bitcoin exchange-traded funds.

These ETFs would allow everyday investors to get exposure to bitcoin (BTC-USD) without having to own it, trading it like they would a stock.

The approvals could also expand widespread acceptance of the worlds biggest cryptocurrency, making bitcoin a potential staple in 401(k)s, IRAs, and pension plans used by everyday people.

The applicants include some of the biggest names on Wall Street, from BlackRock (BLK) to Franklin Templeton (BEN), as well as a number of firms better known in the crypto world.

JPMorgan Chase (JPM) and Goldman Sachs (GS) are among the giant banks that have offered to help some of these money managers create and redeem shares of their new funds.

The challenge before the industry is that the SEC has in the past denied such applications, arguing the products were vulnerable to market manipulation. The regulator is also the industry's most prominent adversary, having filed numerous lawsuits and enforcement actions against key players.

Those in the crypto world say there are signs that the SEC wont stand in the way this time around and will give the green light to all 14 applicants at once.

Such optimism helped bitcoin surge more than 150% in 2023 and start 2024 by rising above $45,000, its highest level in nearly two years.

It is also helping investors move past the memories of 2022, when some of the industrys biggest names were wiped out as the values of digital assets collapsed.

"The bitcoin ETFs will be the official nail in the coffin on that prior crypto winter," Laurence Latimer, CEO and co-founder of crypto firm Dinara, told Yahoo Finance.

A number of applicants including Bitwise, Hashdex, and VanEck have already released teaser video ads ahead of what they expect to be their potential launch.

Story continues

"Bitcoins time has arrived," reads the tagline of the Hashdex spot.

But in a sign of how much is riding on these approvals, bitcoin tumbled nearly 10% earlier this week after one industry analyst floated a contrarian view of what the SEC may do.

Markus Thielen, head of research at crypto investment firm Matrixport, said in a note Tuesday that the SEC will reject all ETF applications this month and the products wont get the green light until at least the second quarter. If that happens, bitcoin prices could fall by 20%, according to the note.

"While we have seen frequent meetings between the ETF applicants and staff from the SEC, which resulted in the applicants refiling their applications," the note added, "we believe all applications fall short of a critical requirement that must be met before the SEC approves."

The note cited general skepticism from SEC chair Gary Gensler, who has led the agencys larger crackdown on the crypto world.

It also came as bitcoin trading volume spiked to highs not seen since the collapse of regional lender Silicon Valley Bank in March 2023.

The crypto industry has been waiting more than a decade for this moment.

The first application to create a spot bitcoin ETF came in 2013 from crypto entrepreneurs and twins Tyler and Cameron Winklevoss, famous for their early role in the creation of Facebook. Since then, the SEC has denied more than 30 similar applications.

A key turnaround moment came last year in June when the worlds biggest money manager, BlackRock, filed for a spot bitcoin ETF. The interest from one of Wall Streets biggest names sparked other asset managers to follow suit.

Another important development came last August when one of the ETF applicants, Grayscale Investments, won a key legal victory over the SEC. Grayscale had sued the SEC in 2022 after it wasn't allowed to convert its Grayscale Bitcoin Trust (GBTC) into a spot bitcoin offering.

Its core argument was that the agency had already approved exchange-traded products that held bitcoin futures contracts and thus had "acted arbitrarily and capriciously."

A three-judge panel of the District of Columbia Court of Appeals in Washington sided with Grayscale, saying the firm had "advanced substantial evidence" its product was similar to bitcoin futures ETFs previously approved by the SEC.

That forced the SEC to reconsider Grayscales spot bitcoin ETF application, along with others filed by rival money managers.

The SECs first deadline to consider these various ETFs is Jan. 10 for a joint offering from Ark Invest and 21Shares. Other deadlines are as late as April.

ETF issuers and analysts say they believe the SEC will choose to approve all applications that pass muster by the earliest January deadline, so as not to give any first movers an advantage over the rest of the industry.

One of the applicants, Ark Investment Management CEO Cathie Wood, told Yahoo Finance that the dominant providers of spot bitcoin ETFs will be those that take in the most money from investors right out of the gate.

The winners "will be a few and it will be the most liquid," she said.

Historically, launches for other bitcoin products have sent bitcoins price on a wild ride.

It happened in 2017 with the launch of the countrys first bitcoin futures contracts and then in 2021 with the SECs approval of the country's first bitcoin futures ETFs. Prices soared and then fell by large amounts in the year following the launches.

This time around, "there's good pent-up demand so you'll see good flows, Sandy Kaul, Franklin Templeton's head of digital assets, told Yahoo Finance.

"But I think that the transformative flows are really going to come in about six months to a year when people start to see what these ETFs actually offer in terms of the portfolio performance."

What is clear, she added, is that the approval of these products would offer "a real affirmation of the crypto ecosystem being a legitimate investment opportunity."

David Hollerith is a senior reporter for Yahoo Finance covering banking, crypto, and other areas in finance.

The price of bitcoin rose more than 150% in 2023. A prior version of this article incorrectly reported the rise was 164% through January 1.

Click here for the latest crypto news, updates, values, prices, and more related to bitcoin, ethereum, dogecoin, DeFi, and NFTs

Read the latest financial and business news from Yahoo Finance

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The crypto world is ready to take bitcoin ETFs to the masses. It needs the blessing of a longtime foe first. - Yahoo Finance

The ETF industry is buzzing as long-awaited spot bitcoin ETFs are likely to get the green light from the SEC in the coming days. We expect trading of multiple products to begin soon after. VettaFi is so focused on advisor education about the asset class, we are hosting a Crypto Symposium on January 12.

This two-plus hour virtual event, complete with continuing education credits, will provide much needed insights. We believe many advisors understand ETFs but need to learn how to talk to clients about cryptocurrencies. We also know that many investors are knowledgeable about cryptocurrency given that bitcoin rose more than 150% in 2023. Yet, they need to understand what makes investing in ETFs unique.

A December survey of advisors Bitwise Asset Management and VettaFi conducted helps set the stage. In the prior 12 months, 88% of advisors were asked questions by a segment of their client base. Approximately 10% are hearing from more than one-fifth of their relationships. However, there is strong likelihood that more people see and hear cryptocurrency advertisements once spot bitcoin ETFs are trading and the competition heats up.

VettaFi expects multiple spot bitcoin ETF products will be trading soon. Which is great, since an ETF is the preferred choice of gaining access to cryptocurrency. Nearly two-thirds of surveyed advisors are looking to ETFs. All other choices provided including direct ownership of coins, a mutual fund, or a separately managed account were significantly less popular.

Currently there are futures-based bitcoin and Ethereum ETFstrading in the U.S. The largest, theProShares Bitcoin Futures ETF (BITO), has $1.8 billion in assets. However, ARK, Bitwise, and VanEck provide competing futures-based crypto ETF alternatives. These three firms along with BlackRock, Franklin Templeton, Invesco Galaxy, and WisdomTree are among those awaiting approval of a spot bitcoin ETF. TWe expect this is imminent. This would be a milestone event and a decade in the making.

The largest provider of a bitcoin-based product is Grayscale, which offers the Grayscale Bitcoin Trust (GBTC). Grayscale is trying to convert GBTC into an ETF and we expect it to be allowed to do so shortly.

On January 12, Tom Lydon and I will be covering cryptocurrency investments with many industry experts, including Eric Balchunas of Bloomberg Intelligence. We expect attendees to learn more about the likely benefits of using an ETF, how bitcoin can fit into a broader portfolio, and what the outlook is for 2024. However, because this is a new asset class for many, we will talk about the risks and what clients need to know. I hope you will join us by registering today.

For more news, information, and analysis, visit the Crypto Channel.

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A Spot Bitcoin ETF is Coming Soon Join VettaFi Event to Learn More - ETF Trends

After a solid 2023, cryptocurrencies have started this year on a high. Bitcoin (BTC), the worlds most prominent cryptocurrency, has particularly been on a dream run over the past couple of months and the rally is set to gain pace in the coming months as multiple positive developments have given investors sentiment a boost.

Bitcoin rallied past $43,000 in December 2023, and on Jan 2, it surged past the $45,000 mark for the first time since April 2022. Although the cryptocurrency retreated from its 21-month high, it hovered around $44,200 on Jan 4.

Over the past three months, Bitcoin has rallied more than 61%. The Federal Reserve didnt hike interest rates in its last three FOMC meetings in 2023 after raising interest rates by 525 basis points, as its aggressive monetary tightening campaign has seen inflation decline sharply.

Cooling inflation has also raised hopes that the Federal Reserve will soon end its monetary tightening campaign and start cutting rates this year, which could be as early as in March. Higher interest rates have adverse effects on growth-focused sectors like technology, consumer discretionary and cryptocurrencies.

Also, investors are optimistic about the imminent approval of a Bitcoin exchange-traded fund (ETF) by the Securities and Exchange Commission (SEC). This approval is expected to have a significant positive impact, providing strong support to the cryptocurrency market.

Investors are currently looking forward to the potential approval of a spot Bitcoin ETF by the SEC as early as the first half of 2024.

Coinbase Global, Inc. COIN offers financial infrastructure and technology to support the global cryptocurrency economy. COIN provides a main financial account for consumers in the crypto space, a marketplace with liquidity for institutional crypto asset transactions, and technology and services for developers to build crypto-based applications and accept cryptocurrencies securely as payment.

Story continues

Coinbase Globals expected earnings growth rate for the current year is 92%. The Zacks Consensus Estimate for current-year earnings has improved 16.7% over the last 60 days. Coinbase currently carries a Zacks Rank #2 (Buy).

NVIDIA Corporation NVDA is a major player in the semiconductor industry and has been one of the standout success stories of 2023. As a leading designer of graphic processing units (GPUs), the value of the NVDA stock tends to surge in a thriving crypto market. This is primarily due to the crucial role that GPUs play in data centers, artificial intelligence, and the mining or production of cryptocurrencies.

NVIDIAs expected earnings growth rate for the current year is 268%. The Zacks Consensus Estimate for current-year earnings has improved 14.4% over the last 60 days. Currently, NVIDIA has a Zacks Rank #2. You can seethe complete list of todays Zacks #1 Rank (Strong Buy) stocks here.

PayPal Holdings, Inc. PYPL provides digital wallet services that enable users to purchase, transfer, and sell various cryptocurrencies, such as Bitcoin, Ethereum, Bitcoin Cash and Litecoin. Through PYPL, users can use cryptocurrencies to pay for goods and services from online merchants. Additionally, PayPals mobile wallet platform, Venmo, also allows users to engage in cryptocurrency buying and selling activities.

PayPal Holdings expected earnings growth rate for the current year is 20.6%. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last 60 days. PYPL currently has a Zacks Rank #3 (Hold).

Block Inc.SQ is an online digital and mobile payment platform for consumers and merchants and is the parent company of Square and Cash App. The users of Cash App can buy, sell, send and receive Bitcoin. In addition, SQs decentralized tbd platform allows developers to build decentralized finance applications to run on programmable blockchains. SQ is also one of the largest Bitcoin investors.

Block has an expected earnings growth rate of 90% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.3% over the last 60 days. SQ currently carries a Zacks Rank #3.

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4 Stocks to Watch as Bitcoin Rally Continues Into 2024 - Yahoo Finance

Published 1 minute earlier on

Investment firm VanEck on Friday pledged 5% of its potential profits from its spot bitcoin ETF, if it gets approved, to Bitcoin BTC -0.42% core developers at Brink.

"Your tireless dedication to decentralization and innovation is the cornerstone of the Bitcoin ecosystem, and we're here to support itmore details to come," said VanEck in a post on X.

VanEck added that it has made an initial $10,000 donation to Brink to support its work.

"I think it's fantastic news," said Jonathan Bier, who serves on Brink's board. "Open source development work on Bitcoin is really important and it's fantastic that VanEck will generously give back to the core backbone of the ecosystem."

Brink was founded in 2020 to boost the Bitcoin protocol through research and development, and by supporting the Bitcoin developer community. It has a fellowship program to onboard new software engineers into Bitcoin development and a grants program for existing Bitcoin developers.

In June 2023, Brink received $5 million of funding from Jack Dorsey's Smart Small funding initiative.

Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.

2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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VanEck pledges 5% of potential spot BTC ETF profits to Bitcoin core developers at Brink - The Block - Crypto News

A flood of investment money looks poised to pour into the cryptocurrency market if the U.S. Securities and Exchange Commission does as expected and approves bitcoin ETFs from a dozen or so firms in the next few days, as virtually everyone crypto-savvy or not gets easier access to the world of bitcoin (BTC).

That would force ETF issuers to scramble to buy potentially tens of billions of dollars worth of the original cryptocurrency to satisfy a surge in demand from mom-and-pop investors (grandma, grandpa and baby, too). The current biggest bitcoin investment vehicle, a relatively hard-to-buy product called the Grayscale Bitcoin Trust, has $26 billion of assets, giving some sense of the appetite for BTC even before the floodgates open.

Is the industry up to the task? Yes, according to key market players, who believe bitcoin trading is liquid enough to easily accommodate such giant purchases from issuers including BlackRock, Grayscale, Fidelity and Galaxy/Invesco.

To make sure that any large amount of capital trades efficiently, two key players have to step in: Trading firms called authorized participants (APs) and market makers.

APs create and redeem ETF shares, directing investor money into and out of the fund; while that may sound mundane, it's a vital part of ensuring the price of an ETF remains closely linked to the value of the fund's underlying holdings. With Grayscale's trust, shares cannot be redeemed. That can lead to there being an oversupply of trust shares, putting downward pressure on their price. And, indeed, the trust has wandered far below its so-called net asset value in recent years part of why Grayscale wants to turn it into an ETF.

While the work of APs is considered the "primary" market, another key player, market makers, is needed in the "secondary" market, for example on exchanges, where most of the trading is done. Market makers build on the role APs fill by buying ETF shares when others want to sell them, and vice versa. If prices get out of whack, they can earn a profit by trading to nudge them back in line. In some cases, market makers also play the role of the AP.

Several large Wall Street firms have agreed to serve as APs for bitcoin ETFs: JPMorgan Chase, Jane Street and Cantor Fitzgerald. Others are likely.

Trading firm DRW is one of the biggest liquidity providers in the world. Its crypto division, Cumberland DRW, has been preparing for bitcoin ETFs by onboarding issuers and sourcing bitcoin to make sure it's ready when orders come in from APs if and when the new investment vehicles are on the market, the company told CoinDesk.

While it might seem like billions of dollars of bitcoin orders would be too much for the market to handle, traders are certain that the market is efficient enough to absorb this kind of trading volume.

"If there is demand, there'll be supply," Rob Strebel, Cumberland DRWs head of relationship management, said in an interview. I would be surprised if the issuers and regulators would allow this product to launch if it wasnt confident about being able to source liquidity. I think its in everyones best interest to make sure that liquidities all lined up, and Im confident that were going to be able to provide the liquidity thats needed.

ETFs are appealing products for investors because they're relatively easy to access. In the U.S., conventional brokerage accounts let customers buy essentially any of the thousands of stocks and ETFs that are listed in the nation. A bitcoin ETF would be just as easy to purchase as Apple's stock.

Another selling point: They tend to closely track the value of the asset they hold. Gold ETFs, for instance, generally move in lockstep with the price of the gold they own. How? Authorized participants dynamically create and redeem ETF shares to keep the fund's price tied to the underlying asset.

Over the past 45 days, daily bitcoin trading has averaged about $22 billion on major exchanges, though there have been spikes to around $40 billion on some days, according to CoinMarketCap.com data analyzed by CoinDesk. Observers believe that's enough to meet demand from bitcoin ETF issuers.

"The market can absorb that new layer of demand for the ETF market," Laurent Kssis, director at financial services firm CEC Capital and former managing director at 21Shares, said in an interview.

Though the new wave of money is potentially positive for the overall health of the market, it is unclear whether it'll have an impact on the price of bitcoin itself, which would depend on the demand for the ETF and how fast it comes, she added.

"Not all ETFs will get that kind of traction," she said. "I strongly believe the investment demand will be skewed towards BlackRock."

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Bitcoin ETFs Could Spark Huge BTC Trading. The Market Appears Up to the Task - CoinDesk

Alex Dovbnya

Amid growing optimism for Bitcoin ETF approval, experts outline 5% chance of SEC rejection

Amid a climate of heightened anticipation for the approval of a Bitcoin exchange-traded fund (ETF), a sliver of uncertainty persists.

Bloomberg's Eric Balchunas has pointed to a 5% chance of rejection by the U.S. Securities and Exchange Commission (SEC).

The crypto market, known for its volatility, is reacting nervously to these possibilities, with recent price actions showing the gravity of the upcoming SEC decision.

The scenarios leading to a rejection of Bitcoin ETF proposals are diverse but considered unlikely by market experts. The first scenario involves Ark Investment Management withdrawing their proposal with hopes pinned on a positive outcome in March, a move considered improbable given their commitment to the process. Another scenario could see the SEC denying the proposals using new reasons or sidestepping a court's decision, potentially leading to further legal tangles.

These scenarios, while not expected, are part of the nuanced risk assessment that seasoned investors and analysts are considering as the decision date looms.

The mere possibility of a Bitcoin ETF rejection recently sent ripples through the cryptocurrency market, with Bitcoin's price taking a sudden downturn to the sub-$41,000 level.

Meanwhile, a recent report from Fox Business relayed BlackRock's expectations that the SEC is poised to green-light their application for a spot Bitcoin ETF in the coming week.

Jane Street and JPMorgan were recently revealed as the broker-dealers ready to manage the cash flow for BlackRock's ETF, pending regulatory approval.

About the author

Alex Dovbnya

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. Hes particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.

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Can Bitcoin ETF Still Be Rejected? - U.Today