The First Spot Bitcoin ETF in the US Potentially Launches Next Week

The Bitcoin ETF has the potential to be approved by the SEC and released in the near future. (Photo; Doc. Dz-Techs)

JAKARTA - Bitcoin investors in the United States (US) are waiting for good news from the United States Securities and Exchange Commission (SEC) regarding the approval of the spot Bitcoin Exchange-Traded Fund (ETF). A spot Bitcoin ETF is an investment product that tracks Bitcoin prices directly and allows investors to buy and sell Bitcoin without having to own the crypto asset.

According to a Reuters report, the SEC has the potential to announce their decision on Tuesday or Wednesday this week. If approved, the first spot Bitcoin ETF in the US could launch as early as next week. This will be a milestone for the crypto industry, as Bitcoin Spot ETFs are considered more attractive than previously launched Bitcoin futures ETFs.

Bitcoin futures ETFs, such as those offered by ProShares and VanEck, do not hold physical Bitcoin, but instead use exchange-traded futures contracts. This can lead to price differences between ETFs and Bitcoin, as well as additional costs for rolling futures contracts. Bitcoin spot ETFs, on the other hand, will hold Bitcoin directly and reflect the actual market price.

Currently, there are eight companies that have submitted Bitcoin spot ETF applications to the SEC, namely Blackrock, Vaneck, Valkyrie, Bitwise, Invesco, Fidelity, Wisdomtree, and the Ark Invest/21shares joint venture. They all re-filed last Friday, after the SEC asked them to withdraw their previous filings in November 2023.

The first deadline for the SEC to make a decision is January 10, which applies to a Bitcoin spot ETF filed by Ark Invest/21shares. However, many analysts and observers predict that the SEC will approve several Bitcoin spot ETFs simultaneously, to avoid giving special treatment to any one issuer.

One factor that may influence the SEC's decision is the fee structure offered by each issuer. Valkyrie, for example, announced a management fee of 0.80%, which is the same as the rate proposed by Ark/21shares. Fidelity, on the other hand, offers a very low management fee of 0.39% for its Wise Origin Bitcoin Fund. Invesco also provides incentives with a fee of 0.59% and a six-month waiver for the first asset of  5 billion US dollars (around IDR 71.5 trillion).

In addition, several issuers have also prepared initial capital to invest in their Bitcoin spot ETFs. Bitwise, for example, stated in their filing that they plan to invest their ETF with 200 million US dollars  (around IDR 2.86 trillion).

Blackrock, the world's largest  asset manager, also revealed plans to invest in their ETF with  10 million US dollars  (around IDR 143 billion) on January 3. Blackrock has named JPMorgan as a key authorized participant, even though JPMorgan CEO Jamie Dimon is known to be a critic of Bitcoin.

The approval of a Bitcoin spot ETF in the US could provide a major boost to the crypto market, which is currently undergoing a correction. The price of Bitcoin fell from an all-time high of above USD 69,000 (around IDR 986 million) in November 2023 to around USD 46,000 (around IDR 657 million) currently. Bitcoin spot ETFs can attract interest from retail and institutional investors, as well as increase market liquidity and transparency.