Get to know the progress and deadlines of all spot BTC ETF applications in one article. Which ETF will be approved first?

23-08-29 21:00

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Source: BeInCrypto

Translation: Blockchain Knight

Crypto market has undergone a paradigm shift. A series of spot BTC ETF applications have reached the SEC, with each fund hoping to provide a new channel for investors to enter the digital gold rush.

Before delving into the current BTC ETF applications and deadlines, it is crucial to understand the concept of ETF and its potential impact on the crypto industry.

What is BTC ETF and how does it work?

ETF, or Exchange Traded Fund, is a hybrid between individual stocks and mutual funds. It provides a basket of assets, such as stocks, bonds, or commodities, that can be traded on major stock exchanges.

Unlike mutual funds that are priced once at the end of a trading day, ETFs reflect real-time price fluctuations of their underlying assets. As a result, investors can buy and sell them just like regular stocks.

On the other hand, BTC ETF is a natural evolution of this idea, catering to the needs of the crypto industry. Essentially, it is an ETF that tracks the value of BTC.

Unlike directly owning BTC, investors sometimes need to participate in complex storage and security measures. BTC ETF allows investors to invest in BTC in a familiar traditional form. This means that while investors can hold shares of BTC value through ETF, they do not necessarily hold BTC itself.

The charm of BTC ETF lies in its potential to bridge the gap between traditional finance and the crypto industry. For investors accustomed to the regulatory environment of the stock market, ETFs provide an easier way to enter the world of crypto investments without having to master the complexities of digital wallets or decentralized exchanges.

However, the process of approving BTC ETFs has not been without obstacles. Market manipulation, liquidity, and the inherent volatility of Crypto industry assets are some of the reasons why regulatory agencies such as the SEC have always been cautious.

Existing BTC ETF Application List for Spot Trading

Against this backdrop, the current series of BTC ETF applications highlights a historic moment in financial history, marking the intersection of traditional investment tools and digital assets. In fact, BTC has witnessed multiple financial institutions vying to create spot ETFs, providing investors with easier ways to obtain returns.

SEC is evaluating these applications, and the following is a detailed list of all spot BTC ETF applications::

The ARK 21Shares BTC ETF, launched in collaboration between Ark Investment Management and 21Shares, is one of the top performers in the industry. They have been seeking approval since 2021.

Due to concerns about market manipulation and inadequate investor protection measures, the SEC had previously rejected their application. However, Cathie Wood, CEO of Ark Invest, remains optimistic. She speculates that the SEC will approve multiple ETFs at the same time, and success will depend primarily on marketing ability and effective communication.

Wood said, "Because these funds are essentially the same, ultimately it still depends on marketing and communication. We are working hard to promote that our research is in-depth, and we have been doing this since 2015."

However, not everyone agrees with this view. Scott Farnin, legal representative of Better Markets, a US financial reform group, believes that the spot BTC market is easily manipulated, which brings unnecessary risks to investors.

Farnin said, "First of all, the spot BTC market has artificially inflated trading volume due to rampant manipulation and money laundering transactions; secondly, this market is highly concentrated; finally, the BTC network relies on individuals and entities to maintain it. These characteristics of the BTC network make spot BTC very vulnerable to manipulation by criminals, posing unnecessary risks to investors and the public interest, and the proposed rule changes have little effect on eliminating these threats."

Despite this, BlackRock's iShares BTC Trust Fund has still piqued people's interest. As one of the world's most important asset management companies, BlackRock manages over $10 trillion in assets, making its application hard to ignore.

The CEO of CF Benchmarks, Sui Chung, emphasized the company's dedication to market transparency and integrity. He also stated that "CF Benchmarks' price data comes entirely from crypto exchanges that adhere to the highest standards of market integrity and transparency, providing protection for investors. Additionally, BlackRock's repeated involvement indicates that BTC remains an asset of interest to some of the world's largest financial institutions."

Competition for BTC ETF Heats Up

Bitwise Asset Management has also resumed its pursuit of a spot BTC ETF, which comes just days after BlackRock's application, demonstrating the increasingly fierce competition in the industry.

Despite being rejected by the SEC due to fraud and manipulation issues in the past, Bitwise remains steadfast. Matt Hougan, the Chief Investment Officer of Bitwise, suggests that a cautious approach will be taken in approving spot ETFs.

In a similar effort, VanEck's BTC Trust recently submitted a document to the Cboe BZX Exchange. SEC commissioners Hester M. Peirce and Mark T. Uyeda have expressed their concerns and highlighted that the BTC Trust will face significant challenges.

These two commissioners claim that "we believe that the SEC is using a different set of criteria than other types of commodity ETPs to exclude these spot BTC ETPs from the exchanges we regulate."

WisdomTree is not to be outdone and has resubmitted its application for the WisdomTree BTC Trust. Despite two unsuccessful attempts, they still hope to educate investors on the price trends of BTC. The company's dedication is similar to that of Invesco, a giant investment firm managing approximately $1.49 trillion in assets.

Both companies' applications emphasized the risks faced by US investors in the absence of spot ETFs, demonstrating the urgency of their claims.

Finally, Fidelity Investments has also joined the ranks of BTC ETFs, and the Wise Origin BTC Trust shows its ambition. This 193-page application delves into the details of market risks and emphasizes the dangers of investors seeking high-risk alternatives. The company's expertise and $11 trillion in assets under management make it a powerful competitor.