The crypto industry can finally breathe a sigh of relief as a federal U.S. regulator appears to be on the verge of allowing the world’s largest traditional finance asset managers and other firms to list and trade shares of a vehicle that would provide retail and institutional investors exposure to the price of a decentralized, trustless, stateless digital asset (for those in the U.S.). However, as with any bitcoin exchange-traded fund (ETF) drama, there is bound to be some level of excitement involved.
Welcome to State of Crypto, a CoinDesk newsletter that explores the intersection of cryptocurrency and government. Sign up for future editions here.
On Tuesday afternoon, the official X (formerly Twitter) account of the U.S. Securities and Exchange Commission (SEC) announced that all pending applications to list and trade shares of a spot bitcoin ETF had been approved. However, it was soon revealed that the account had been “compromised” and the announcement was actually a doctored image.
Despite this initial setback, on Wednesday, Cboe BZX exchange took further steps towards potentially listing and trading shares of spot bitcoin ETFs, indicating that an approval may be on the horizon.
A spot bitcoin ETF would allow both retail and institutional investors to invest in the asset through regular brokerage accounts, as the shares would be registered securities.
There are several indicators that suggest a spot bitcoin ETF may be approved, possibly even today. Cboe has filed acceleration requests to register the ETFs they plan to list and trade. Additionally, letters were sent out on Tuesday stating their intention to start trading once approvals were granted.
In anticipation of an approval, Fidelity and E-Trade have already begun setting up pages for some of the ETFs that could potentially launch as soon as Thursday morning.
Despite the positive signs, there is still some drama surrounding the potential approval. On Tuesday, the SEC’s X/Twitter account was compromised, leading to a tweet claiming the ETFs had been approved. The SEC has yet to comment on the situation.
On Wednesday, there was further confusion as some individuals misinterpreted the filings from Cboe as approvals, when in fact they were just procedural steps. However, these filings do suggest that approvals may be imminent.
If a spot bitcoin ETF is approved, it will likely be announced on the SEC’s EDGAR database between 4 p.m. ET (21:00 UTC) and 5:30 p.m. ET (22:30 UTC). This window is known as the “magic window” and according to Bloomberg Intelligence’s Eric Balchunas, the announcement could come as early as 4 p.m. or as late as 6 p.m.
According to an individual affiliated with one of the aspiring issuers, the announcements could come even earlier in this window, giving issuers time to file their post-effective amended statements and announce their intention to begin trading on Thursday morning. However, depending on timing, these statements may not be filed until Thursday morning itself.
For the next few hours, we will be in a state of limbo, eagerly awaiting an official announcement while all signs point to an imminent approval.
If you have any thoughts or questions for next week’s newsletter, or any feedback you would like to share, please email me at nik@coindesk.com or find me on Twitter @nikhileshde. You can also join the conversation on Telegram.
