Several assets management firms like BlackRock, Invesco, VanEck, Wisdom, Fidelity, and ARK Invest have updated their ETF applications to include surveillance sharing agreements (SSAs) with Coinbase. Recently, the United States Securities and Exchange Commission accepted the spot ETF applications of BlackRock and Valkyrie, following a similar application by Bitwise and others for the official review process.
Grayscale, a prominent cryptocurrency investment firm, is urging the Securities and Exchange Commission (SEC) to approve all proposed spot Bitcoin exchange-traded funds (ETFs) simultaneously. The aim is to prevent any single entity from gaining an unfair advantage over others. Grayscale’s Chief Legal Officer, Craig Salm, emphasized the need for the SEC to be fair and not pick “winners and losers” among the applicants. However, Grayscale believes that this may not be enough for the SEC, as Coinbase is not a registered securities exchange under the SEC.
Bloomberg ETF expert James Seyffart pointed out that U.S. money is being invested in Canadian ETFs, which could potentially lead to funds being repatriated. Recently, the world’s first Bitcoin ETF celebrated its second anniversary. Despite a 67% decline in trading volume in January 2023, Canadian ETFs with crypto exposure experienced minimal net outflows in 2022. The market has remained subdued since July 2022, but it is gradually expanding, with 45 crypto ETFs now available, including four that were launched in 2022. If all Bitcoin ETFs are approved, the U.S. might experience a surge in funds, while Canada could witness increased outflows.
However, the likelihood of all Bitcoin ETF applications receiving simultaneous approval is low, given that they have different deadlines. On July 25, James Seyffart shared an updated date to watch the current Bitcoin spot ETF race. BlackRock filed the spot Bitcoin ETF in mid-June, and the response from the SEC is expected on September 2. Meanwhile, The Ark and 21Shares Bitcoin ETF refiling have smoothly progressed beyond the first deadline and are now steadily approaching the second deadline, set for August 13th.
The approval of multiple Bitcoin ETFs could lead to increased adoption of cryptocurrencies in the industry. Retail and institutional investors may show more interest in these digital assets, especially with well-known players like BlackRock and Fidelity entering the market, giving them more credibility. Seyffart noted that the approval of a Bitcoin ETF, especially by BlackRock, could lead to higher investment inflows, as it would remove some of the negative perceptions associated with cryptocurrencies.