Here’s Why the SEC Could Approve a Spot Bitcoin ETF This Month

Here’s Why the SEC Could Approve a Spot Bitcoin ETF This Month

Key Insights

  • Valkyrie CIO Steven McClurg predicts that the SEC will approve a spot Bitcoin ETF by the end of November 2023.
  • McClurg expects about $10 billion of inflows into the new Bitcoin ETF within the first one to two months after launch.
  • McClurg believes that a spot Bitcoin ETF would have a positive impact on Bitcoin's market price.
  • Matt Hougan, CIO of Bitwise, predicts that we may see about $50 billion worth of inflows into a Bitcoin ETF market in the next five years.
  • Nate Geraci, president of The ETF Store, Inc., says that we could see the SEC waiting until "early next year".

A new Bitcoin ETF approval may be closer than you think. At least that's what most of the analyst opinions point to.

So far, the US Securities and Exchange Commission (SEC) has been reviewing several spot Bitcoin ETF applications from nearly ten companies.

However, a top executive at Valkyrie now believes that we may even see an approved Bitcoin ETF in November.

Let's see his reasons, and how he expects Bitcoin to perform before this month runs out.

Bitcoin May Still Outperform Itself Before the Year Runs Out

This is no longer news.

The larger part of the crypto industry still sees a Bitcoin ETF approval as an attractive way for investors with less of an appetite for risk to get involved with Bitcoin.

Any investor, anywhere in the world will be able to buy some Bitcoin and HODL, without having to deal with the issues and risks of buying, storing and securing BTC directly.

This seems like a dream come true for most investors.

However, the SEC has remained reluctant and continues to drag its feet. The agency has even mentioned problems relating to market manipulation, custody, valuation, liquidity and investor protection as its reasons.

So far, the SEC has been freely approving Bitcoin futures ETFs, while delaying or rejecting spot applications over the years.

But there is still hope for a spot Bitcoin ETF, according to Steven McClurg, the Chief Investment Officer (CIO) of Valkyrie Investments.

Hope for a Bitcoin ETF Approval in November

Valkyrie Investments is one of the firms with spot ETF filings on the SEC's desk.

In a recent interview, the company's CIO, McClurg stated plainly, that he expects the SEC to approve a spot Bitcoin ETF by the end of November.

Valkyrie currently offers two Bitcoin-related ETFs:

  1. The Valkyrie Bitcoin and Ether Strategy ETF
  2. Valkyrie Bitcoin Miners ETF.

When combined, these ETFs have a combined asset value of $51.1 million.

From this, we can conclude that Valkyrie is no small player in the space. The firm first filed for a spot Bitcoin ETF as far back as January 2021 and has since amended its application several times to address the SEC's questions.

On October 30 2021, the company filed its latest BTC ETF amendment, providing details on things like how the ETF would seed its initial shares with BTC, how it would calculate its NAV (or net asset value) using multiple price sources, how it would communicate the risk factors that arise, and how it would ensure the security and custody of the actual BTC it holds.

According to McClurg's comments during the interview, we might be seeing another round of comments from the SEC in the next one to three weeks.

When these comments are addressed, McClurg says that he hopes the SEC will approve the rule changes under Section 19b-4 of the Securities Exchange Act of 1934.

Even better, the CIO expects this to happen by the end of November.

These rule changes would allow the Nasdaq Stock Market, where the Valkyrie ETF intends to list its shares under the ticker "BRRR", to trade the fund.

However, McClurg also said that the SEC could wait until January to approve the registration statement under Form S-1 of the Securities Act of 1933. He says that these two approvals do not have to happen at the same time, but both are required for the ETF to become publicly available.

Market Demand and Outlook

According to the interview, McClurg remains optimistic about the market demand and outlook for a spot Bitcoin ETF.

He says that he expects about $10 billion of inflows into the new BTC ETF within the first one to two months after launch and that a spot BTC ETF would have a positive impact on the cryptocurrency's market price.

In all, McClurg is not alone in his optimism.

According to Matt Hougan, the CIO of Bitwise Asset Management (another firm that has filed for a spot Bitcoin ETF), we might see about $50 billion worth of inflows into a BTC ETF market in the next five years.

Hougan also says that we will see most of this growth happen towards the end of the 5-year interval.

Nate Geraci, the president of The ETF Store, Inc. also says in this tweet, that we could see the SEC waiting until "early next year"  to ask Valkyrie and the other applicants to put final touches on their S-1 filings.

In total, the SEC has not given any clear indication of when or if it will approve a spot BTC ETF.

However, the agency has also acknowledged that it is actively reviewing these ETF applications, and has to balance them with its mandate to both protect investors and maintain order in the financial markets.

Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.

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