A spot Bitcoin ETF application from Hashdex has been postponed by the SEC
In the United States, Hashdex’s application for a spot Bitcoin ETF has been delayed by the Securities and Exchange Commission (SEC).
As per the regulator’s website, the SEC moved to postpone its decision on Grayscale’s application for a futures exchange-traded fund on Ethereum (ETH).
Using the application, Hashdex plans to convert its futures ETF into a spot Bitcoin ETF. In the US, such a tool is yet to be available. Investors believe its launch will attract institutional investors. As a result, crypto enthusiasts have been scouting for applications.
Up next is Franklin Templeton’s application to launch a spot Bitcoin ETF. The deadline for making a decision on it expires on Nov. 17.
Should the application be successful, Coinbase Custody Trust Company will be the primary custodian of all Ethereum coins once the ETH fund is approved.
Also check the previous blog on this topic : Bitcoin ETF Applicants on Federal Register in step toward SEC approval
Applicants’ list:
- Grayscale
- ARK 21Shares
- BlackRock
- Bitwise
- VanEck
- Wisdomtree
- Invesco & Galaxy
- Fidelity
- Valkyrie
- Global X
- Hashdex
- Franklin Templeton
Chances of Approval:
- While not guaranteed, analysts predict a 90% chance of approval before Jan. 10, 2024.
- The expectation of a spot #Bitcoin ETF has generated optimism in the #crypto market.
Market Response:
What would happen if a bitcoin ETF was approved?
Galaxy Research estimates bitcoin ETF inflows to reach $14B in year one, $27B in year two, and $39B in year three.
Investing in spot Bitcoin exchange-traded funds (ETFs) has been projected to receive a large amount of capital by Galaxy Digital, the crypto venture run by American billionaire Mike Novogratz. ETFs such as these could achieve $14.4 billion in inflows in their inaugural year, potentially reshaping investment landscapes.
It claims spot Bitcoin ETFs are more attractive than existing investment avenues, such as trusts and futures, which currently hold assets valued at more than $21 billion. Investing in ETFs is expected to increase by $27 billion by the second year and $39 billion by the third year, according to the report.
Wealth management could be revolutionized by Bitcoin ETFs
There are profound implications to be gained from this projection. This forecast not only indicates an increase in investor interest, but also a paradigm shift in how cryptocurrency investments are perceived.
A massive transformation is expected to take place in the wealth management sector in the United States by October 2023, according to Galaxy Digital, with assets managed by broker-dealers, banks, and Registered Investment Advisers (RIAs) totaling $48.3 trillion.
As Galaxy says, Bitcoin ETFs provide investors with a secure and regulated way to gain exposure to the cryptocurrency. Traditional funds and banks with established track records in customer protection and sound investment offerings would facilitate these products. Recently, Bitcoin-based financial products have demonstrated strong demand. Within hours, Bitcoin prices soared 10% due to a mere rumor in the previous week. On Monday, the mere mention of BlackRock’s proposed Bitcoin ETF sparked a 12% upswing, clearly demonstrating the market’s
Can Bitcoin Surge 74%?
A surge in Bitcoin prices of 74% could be attributed to Galaxy Digital’s projection of $14.4 billion in influx in the first year. According to this assumption, the cryptocurrency’s value will increase due to the liquidity and price impact of billions of dollars in investments.
There is an urgent need for spot Bitcoin ETFs due to the perceived limitations of existing investment products. Many investors have been hampered by high fees, low liquidity, and tracking errors.
According to Galaxy, spot ETFs can reduce these challenges as well as improve operational efficiency. A benefit of this is the ability to track price changes, fee structures, and liquidity. However, historical data indicates that Bitcoin ETFs typically offer lower fees, compared to hedge funds or closed-end funds. Bitcoin ETF applicants have not disclosed specific fees, but such products are generally more affordable than hedge funds.
SEC is evaluating applications from a variety of players in the industry. Twelve proposals for spot Bitcoin ETFs have been submitted by Grayscale, BlackRock, Bitwise, VanEck, and several other prominent firms. This dynamic signal the growing consensus on the potential of Bitcoin ETFs and the competitiveness amongst industry leaders seeking to pioneer this transformative financial instrument.
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