SEC Prepares To Approve Bitcoin ETF, Here's What Investors Should Know!

The public is still waiting for the approval of the Bitcoin Spot ETF from US regulators. (Photo; Doc. CrystalFunds)

JAKARTA The United States Securities and Exchange Commission (SEC) is preparing to approve a number of Bitcoin Spot ETF proposals, namely exchange-traded funds that track the price of Bitcoin directly. The SEC is said to have held a telephone conference together with a number of companies that filed a Bitcoin spot ETF proposal. The conference with US regulator discussed the requirements and risks related to this investment product.

According to a Fox Business report, the SEC held a "frequent joint phone conference". The conference took place on December 20, 2023 with Bitcoin spot ETF publishers, including BlackRock, Fidelity, WisdomTree, and VanEck. The purpose of the call is to ensure that publishers make "cash formation", which converts Bitcoin into cash before trading ETF shares.

The move aims to reduce the risk of market manipulation and abuse of crypto assets, which is the SEC's main concern in evaluating Bitcoin ETF applications. The SEC also does not allow broker dealers to engage in Bitcoin trading, thus limiting retail investors' access to crypto assets.

Commenting on this, senior Bloomberg analyst Eric Balchunas clarified that the phone conference was not the only one, but that there were many separate calls made by the SEC to the stock exchange and applicants.

He also added that the SEC may ask proposal publishers to comply with stricter models, such as the Prime Execution Agent, which involves third parties buying and selling Bitcoin on behalf of the ETF.

The SEC's decision regarding the spot's Bitcoin ETF is expected to come out on January 10, 2024. The mandatory is the deadline for a number of applications submitted since the beginning of this year. If approved, the Bitcoin spot ETF will be the first product to give the exposure directly to the Bitcoin price on the US stock exchange, which is different from the Bitcoin futures ETF which tracks the price of Bitcoin futures contracts.