Cryptocurrency
Bitcoin ETF applications: Who is filing and when the SEC may decide
The race to list the first spot-traded Bitcoin (BTC) exchange-traded fund (ETF) in the United States has seen the entrance of major financial institutions like BlackRock, Fidelity and VanEck.
While the U.S. Securities and Exchange Commission (SEC) first approved a Bitcoin-linked Futures ETF in October 2021, the current filings are for spot Bitcoin ETFs. Following Grayscale’s recent legal victory against the SEC’s review of its spot Bitcoin ETF proposal, many now believe approval of the investment funds is more likely.
The interest of BlackRock — the world’s largest asset manager with over $8 trillion worth of assets under management — prompted several other institutions to refile for a spot Bitcoin ETF.
Most of these asset managers had to either withdraw their spot Bitcoin ETF filings or face rejection due to the SEC’s reservations concerning a spot-derived ETF. Here are the key Bitcoin ETF applicants:
- BlackRock: BlackRock filed for a spot Bitcoin ETF on June 15, with Coinbase as the crypto custodian and spot market data provider and BNY Mellon as its cash custodian. The filing shocked the crypto and traditional finance world, and the firm’s CEO, Larry Fink, had previously called BTC an index for money laundering. On July 15, the SEC formally accepted BlackRock’s spot Bitcoin ETF application for review.
- WisdomTree: The New York-based asset manager first filed for a spot Bitcoin ETF in the U.S. on Dec. 8, 2021, which was rejected by the SEC in 2022. The agency claimed the ETF fell short in terms of investor protection; however, with BlackRock’s entry in the spot Bitcoin ETF race, WisdomTree refiled with the SEC on July 19.
- Valkyrie Investments: Asset management firm Valkyrie filed its first spot Bitcoin ETF application in January 2021 but faced rejection from the SEC, like many other asset managers. However, with the rejuvenated enthusiasm around a spot Bitcoin ETF, Valkyrie refiled its application on June 21. The ETF would refer to the Chicago Mercantile Exchange’s (CME) reference price for Bitcoin and trade on NYSE Arca, with Xapo as the crypto custodian.
- ARK Invest: ARK filed an application for its ARK 21Shares Bitcoin ETF in June 2021. ARK Invest has partnered with Swiss-based ETF provider 21Shares to offer the fund, and it will launch on the Chicago Board Options Exchange (Cboe) BZX Exchange under the ticker symbol ARKB if approved.
- VanEck: VanEck is one of the earliest Bitcoin ETF applicants, making its first filing in 2018. The asset manager withdrew its application in September 2019 and made a second attempt with the SEC in December 2020, with shares of the trust set to trade on the Cboe BZX Exchange. The firm filed a new application in July 2023.
- Fidelity/Wise Origin: Fidelity Investments first applied for a spot Bitcoin ETF in 2021 and refiled for its Wise Origin Bitcoin Trust on July 19, 2023. The Wise Origin Bitcoin Trust would see Fidelity Service Company serving as the administrator while Fidelity Digital Assets will act as the BTC custodian.
- Invesco Galaxy Bitcoin ETF: Invesco first filed an application for its Invesco Galaxy Bitcoin ETF jointly with Galaxy Digital on Sept. 22, 2021. The joint venture refiled its application in July. The joint Bitcoin ETF would be “physically backed” by Bitcoin, with Invesco Capital Management as the sponsor.
- Bitwise: Bitwise first filed for a spot Bitcoin ETF in October 2021, only to face rejection from the SEC. The asset manager refiled its application in August 2023.
- GlobalX: Fund manager GlobalX joined the ETF race in 2021, along with several other financial giants, when it filed for a spot Bitcoin ETF. The fund manager refiled its application in August 2023, becoming the ninth applicant. The firm named Coinbase as its surveillance-sharing partner.
In light of Grayscale’s recent legal victory and the wave of renewed applications, ETF analysts at Bloomberg have raised their expected approval chances for a spot Bitcoin ETF to 75% from 65%.
NEW: @JSeyff & I are upping our odds to 75% of spot bitcoin ETFs launching this yr (95% by end of ’24). While we factored Grayscale win into our prev 65% odds, the unanimity & decisiveness of ruling was beyond expectations and leaves SEC w “very little wiggle room” via @NYCStein pic.twitter.com/IyEGmWjuHa
— Eric Balchunas (@EricBalchunas) August 30, 2023
As expected, the SEC has delayed its decision on all seven applicants. Analysts had predicted that the SEC may not decide on an ETF until early 2024 when the final deadlines approach (listed below).
John Glover, chief investment officer at crypto lending platform Ledn, told Cointelegraph that the ARK 21Shares “verdict slated for Jan. 10 will be the first real indicator as to whether the SEC is ready to start approving these types of applications. The final deadline is up at that point, and a decision will need to be made one way or another.”
Why has the SEC rejected spot Bitcoin ETFs in the past?
In its earlier rejection of VanEck’s spot Bitcoin ETF, the SEC claimed that the Bitcoin market is not big or mature enough to sustain ETF market demand. The commission also said the price volatility and inadequate level of trading surveillance could potentially leave the market prone to fraud and manipulation.
However, with the entrance of BlackRock, market pundits have started to believe that the chances of a spot Bitcoin ETF being approved are good.
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One of the major factors preventing a spot ETF from getting approved is the nature of the fund.
A futures ETF is based on futures contracts rather than the digital asset itself, which is an important distinction. The futures markets are already heavily regulated to prevent market manipulation, thus making it easier for the SEC to approve such ETFs.
At the heart of these spot ETF rejections is the issuer’s requirement to incorporate a “surveillance-sharing agreement” with a sufficiently large and regulated Bitcoin-related market. Such agreements are integral in ensuring that the SEC can conduct exhaustive investigations in the event of any market irregularities.
A Bitfinex Alpha analyst told Cointelegraph that one of the vital concerns behind the rejection of spot Bitcoin ETFs is the regulator’s ability to track and continuously ensure asset safety and custody. However, for that to happen, the U.S. needs more regulatory and legal infrastructure before the “SEC or other involved parties would be comfortable in allowing an ETF provider to handle it.”
“If not, then the entire purpose of an ETF (which is to circumvent dealing with digital asset wallets or crypto exchanges) is defeated. Thus, it would not be fair to say that spot Bitcoin ETFs do not propose manipulation concerns in the SEC’s eyes. The ProShares Bitcoin ETF disapproval dated back to 2018 clarifies this very point. Another concern with regard to the document’s literature was the ability of the Bitcoin market to handle the volume that would be brought in via the introduction of a spot ETF,” the analyst added.
The SEC is mainly concerned about the robustness of the trading venues. The regulator oversees futures exchanges like the CME and the Cboe, and any futures ETFs will be restricted to only trading on those regulated venues. Whereas there are no SEC-regulated spot exchanges.
However, not everyone agrees with the SEC’s assumptions about the vulnerabilities of the spot crypto ETF market. James Koutoulas, the founder of a futures-focused hedge fund Typhon, told Cointelegraph:
“I can attest that the crypto futures are far inferior to the spot in terms of tracking error. The concept that a U.S. regulator can provide adequate ‘surveillance’ against market manipulation on a global 12-figure market is delusional. So, honestly, it probably comes down to passing the buck to the CFTC rather than retaining accountability. Given the SEC has an ‘investor protection’ mandate.”
He added that by continuing to reject the simplest products like a BTC ETF, the ”SEC keeps pushing demand for crypto offshore and unregulated players. While a BTC ETF may not be perfect, it is much safer than buying BTC with Gensler’s family friend SBF [Sam Bankman-Fried] at FTX.”
Richard Gardener, CEO of tech infrastructure firm Modulus, believes futures ETFs have long been seen as more palatable for regulators and that the decision over a spot ETF is a matter of when not if.
He told Cointelegraph that a spot BTC ETF is “coming, sooner rather than later, and the heavy investment from major players like BlackRock and Fidelity signal this. As long as the major players are in the hunt, the industry is seen as viable in the long term, despite any short-term setbacks. If the SEC continues to refuse to act, politicians will be forced to act and develop their own answer to the crypto dilemma.”
Ether futures ETF have more chances of approval
While crypto enthusiasts would prefer to see spot ETFs, which would legitimize crypto as an asset class, U.S. regulators seem more likely to support futures ETFs.
Bloomberg analysts have predicted that the chances of approval for an Ether (ETH) futures-derived ETF are over 90%, with nearly a dozen institutions lined up for approval.
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Reports in financial media suggested a high possibility of the SEC approving an Ether futures-based ETF as soon as October.
This not surprising to us, we had said they would approve Ether Futures early on in race. Nice to be validated. Now what does it mean for spot? Hard to say beyond it shows that their views/policy/tolerance can change. https://t.co/JXCxNUpj2U
— Eric Balchunas (@EricBalchunas) August 17, 2023
Ken Timsit, managing director at blockchain startup accelerator Cronos Labs, told Cointelegraph that the “thesis in favor of futures is that futures would enable investors to send signals about the price evolutions expected by the market, which in turn would help to dampen the volatility of Bitcoin and Ethereum price and counterbalance the large price swings that we have seen recently.”
Doug Schwenk, CEO of Digital Asset Research, told Cointelegraph that the “near-term psychological impact would most likely give a boost to crypto markets as another proof point that regulators remain open to evolving the listed space and continued hope for the elusive spot ETF.”
The past few weeks have been quite eventful for Ripple and its native token, XRP. In this article, we’ll review the most recent updates and analyze the asset’s price dynamics.
Is the Legal Battle Against the SEC Over?
The lawsuit between Ripple and the US Securities and Exchange Commission (SEC) has been among the hottest topics in the crypto industry for years. Over the past several months there were numerous developments which brought the case closer to its long-anticipated final.
Long story short, in March, Ripple’s CEO claimed that the SEC had dropped the appeal against the company. Earlier this month, the two sides shook hands on a $50 million settlement, which would mean the official end of the tussle if the judge on the case approves it.
This represents a significant reduction from the $125 million fine that Ripple was previously ordered to pay for allegedly breaking certain securities laws.
The XRP Army celebrated the latest move, but some members of the agency seemed unhappy. SEC Commissioner Caroline Crenshaw, for instance, argued that this ruling undermines the previous one and discredits the watchdog’s enforcement program.
“The settlement joins a line of dismissals that collectively erode the credibility of our lawyers in court who are being asked to take legal positions today contrary to the ones taken just months ago. And it stands in defiant contravention of the doctrine of (the) regularity of government affairs,” she added.
XRP ETF on the Way?
The introduction of the first spot XRP exchange-traded fund (ETF) in the United States has been a mission for multiple well-known companies, including Grayscale, 21Shares, Bitwise, WisdomTree, and others.
Not long ago, the SEC delayed its decision on Bitwise’s application, extending the period to June 17. The community has now shifted its attention toward July 2, which marks the final deadline for the SEC’s decision on Grayscale’s proposal to convert its Digital Large Cap Fund (GDLC), which includes XRP, among other cryptocurrencies, into a spot ETF.
The launch of such a financial vehicle will give investors additional options to gain exposure to Ripple’s cross-border token, which might positively impact its price. According to Polymarket, the odds of the product seeing the light of day before the end of the year are close to 80%.
While a spot version is still not live in the US, Teucrium and ProShares recently received the green light to launch futures-based XRP ETFs in the world’s biggest economy. Those curious to check all developments on that front can take a look at our detailed article here.
RLUSD Gains Traction
Ripple made the headlines last year when it announced its plans to design a stablecoin pegged 1:1 to the American dollar. The product, dubbed RLUSD, went live in mid-December and was initially embraced by leading crypto exchanges such as Uphold, Bitso, Bitstamp, Moonpay, and more.
In the following months, other popular industry players followed suit. For instance, Kraken allowed trading services with RLUSD in April.
Most recently, the US-based Gemini also hopped on the bandwagon. The exchange, led by the Winklevoss twins, enabled deposits and withdrawals approximately a week ago.
While RLUSD has made some serious progress in recent months, it still lags behind the big names in the niche. As of this writing, it has a market capitalization of just north of $315 million, while the leaders, USDT and USDC, have $150 billion and $60 billion, respectively.
XRP Price Outlook
Ripple’s native cryptocurrency was at the forefront of gains yesterday (May 12), with its price soaring to a two-month peak of almost $2.70. In the following hours, it retraced to the current $2.54 (per CoinGecko’s data).
Its impressive surge caught the eye of multiple analysts, some of whom envisioned a further upswing in the short term. The X user, Captain Faibik, predicted a pump to $5, citing a falling wedge pattern breakout.
Crypto Patel reminded that XRP has surpassed the $2 support zone. “If price holds above this level, we could see a move toward $3.28 and eventually $10+,” they added.
Meanwhile, Ali Martinez estimated that “on-chain data shows XRP has no major resistance clusters ahead,” suggesting the “up only” path could be in play.
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Bitcoin (BTC) has continued to flash bullish signals, with on-chain data and technical indicators reinforcing the narrative of an ongoing uptrend despite minor short-term pullbacks.
At the heart of this optimism is the rise in the flagship cryptocurrency’s realized price, a key market metric that reflects the average purchase price of BTC currently in circulation.
Realized Price Signals Sustained Bullish Momentum
According to an analysis by CryptoQuant contributor Crypto Dan, the realized price is climbing steadily, a trend that typically comes before bullish momentum rather than market downturns.
“The reason the realized price is rising is that more and more market participants are purchasing Bitcoin at higher prices,” Dan explained, describing the ongoing increase as “evidence that Bitcoin is still in an uptrend within its current cycle.”
He attributed much of this upward movement to institutional inflows through spot BTC ETFs and corporations like Strategy, which recently bought 13,390 BTC for more than $1.3 billion. Others like Metaplanet have also contributed, acquiring 1,271 BTC for about $126.7 million.
This steady capital inflow has not just buoyed sentiment but is tangibly pushing on-chain metrics higher.
Also complementing this trend is a historic shift in Bitcoin’s supply dynamics. Data from Glassnode shows that the cryptocurrency’s illiquid supply, held by entities that rarely sell, has hit a cycle high of 14 million BTC.
It means that long-term holders are locking up their stash and reducing market liquidity, with Santiment reporting that whales have accumulated an additional 83,000 BTC in the last month. Observers often view this hoarding behavior as a sign that investors are confident prices will appreciate in the future.
Bitcoin Closing in on ATH
The technical picture further echoes this bullishness. CQ analyst Crazzyblockk recently revealed that the Binance Taker Buy-Sell Ratio remains elevated, indicating consistent buying pressure, while funding rates on major exchanges have stayed positive.
Pseudonymous analyst Mr. Wall Street has even forecast that BTC could push as high as $200,000 before the end of this market cycle.
Presently, Bitcoin is trading at around $103,468, a slight 0.9% drop from yesterday’s price, having oscillated between an intraday high of $104,536 and a low of $101,109 per CoinGecko data.
The small dent hasn’t taken much away from BTC’s almost 10% gain in the last seven days and nearly 22% jump over the past month. Additionally, it is up more than 64% on a yearly scale, and edging ever closer to its all-time high of $108,786, which exceeds the current price by less than 5%.
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TL;DR
ETH surged substantially in the past weeks, with analysts eyeing $2,800–$12,000 as potential targets, comparing its rebound to BTC’s post-COVID rally.
SOL climbed 20% weekly, with over 11 million wallets now holding 0.1+ SOL – suggesting rising retail interest that could fuel a further pump.
What’s Next for ETH?
The second-largest cryptocurrency stole the show in the past several days, with its valuation rising by almost 40% on a seven-day scale. Earlier this week, it crossed $2,600, the highest point since late February. In the last 24 hours, it witnessed a slight retracement and currently trades at just south of $2,500.
ETH’s strong rebound has sparked widespread excitement in the crypto space, with numerous X users speculating that the rally is just getting started. For instance, the analyst with the moniker CRYPTOWZRD envisioned a further upside toward the resistance of $2,800.
“Once Bitcoin regains confidence, Ethereum should see a quick upside move towards $2,800 and beyond,” they added.
Crypto Tony and Reed Carson also weighed in. The former claimed that a breakout above $2,750 could push the price to levels not seen since last year. Reed Carson argued that ETH’s dump below $1,400 in April was very similar to BTC’s crash under $4,000 during the COVID-19 crisis in the spring of 2020.
They believe that in both cases, the plunge resulted from economic uncertainty and panic selling. The analyst reminded of BTC’s price explosion in the following years, predicting that ETH can follow a similar path and hit $10,000 or even $12,000 by the peak of the bull cycle.
Another X user who gave his two cents is the well-known analyst Michael van de Poppe. He expects “shallow corrections” but sees such a scenario as a buying opportunity:
“If the markets provide a correction, then I’d be interested in anything between $2,100-2,250 for ETH.”
SOL’s Targets
Solana’s SOL has also caught the recent green wave in the crypto sector, albeit charting less substantial gains than ETH. As of this writing, it trades at roughly $174, representing a 20% weekly increase.
Among those touching upon the asset’s next potential targets was KALEO. The X user told his almost 700,000 followers that SOL is “slowly but surely grinding higher.”
“I still believe this move back from the lows results in a god candle that sends straight to new all-time highs sooner rather than later,” they claimed.
Just a few days ago, the analyst forecasted that Solana’s price could explode to a staggering $1,000.
For his part, Ali Martinez recently said that SOL has reached “a critical resistance area” at $175. He also revealed that the number of wallets holding at least 0.1 tokens has surged past 11 million in the past two weeks.
The development signals that more people have entered the ecosystem. The low threshold of just 0.1 SOL suggests that many of the newcomers could be retail investors, potentially acting as a precursor to a further price rally.
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