Waiting for the final decision tomorrow.

By Mary Liu, BitpushNews

The highly anticipated ETF approval event caused a major uproar. At 4:11 pm Eastern Time on Tuesday, the official X account of the U.S. Securities and Exchange Commission (SEC) posted a message stating, "Today, the U.S. Securities and Exchange Commission approved the listing of Bitcoin ETF on all registered national securities exchanges. The approved Bitcoin ETF will be subject to ongoing regulation and compliance measures to ensure continued investor protection."

The post also included a quote from SEC Chairman Gary Gensler: "Today's approval enhances market transparency and provides investors with the opportunity to effectively access digital asset investments within a regulated framework."

This surprise came as a "sudden" one, as many analysts had previously indicated that the approval news might be announced tomorrow. It was later confirmed that the SEC's X account had been compromised, and the post about the spot Bitcoin ETF was fake news.

SEC stated, "We will work with law enforcement and government partners to investigate this matter and determine the subsequent measures related to unauthorized access and any improper conduct."

In response to this news, Bitcoin experienced a short-term plunge of nearly $2500, dropping to a low of $45,529 per coin, with over $40 million in cryptocurrency liquidations across the entire network within an hour.

Cameron Winklevoss, co-founder of the cryptocurrency exchange Gemini, commented, "SEC has finally shown the world what it's best at: 'manipulating the market and harming American investors'."

This event has also attracted the attention of U.S. lawmakers. Republican Senator Bill Hagerty of Tennessee posted on X, stating that the SEC needs to be held accountable for the "market-impacting mistake" it has made.

Republican Senator Cynthia Lummis of Wyoming stated, "Fraudulent announcements, such as those posted on SEC social media, can manipulate the market. We need transparency about what has happened."

Waiting for the final decision tomorrow

Industry insiders believe that the launch of the first spot Bitcoin ETF in the U.S. is a done deal. However, approval still cannot be 100% guaranteed, especially due to the existing biases from the "wild world" of crypto.

Bloomberg analyst Eric Balchunas revealed that sources indicated the SEC would announce the approval news between 4-5 pm Eastern Time on January 10.

The U.S. Securities and Exchange Commission (SEC) faces a final deadline on Wednesday to approve or reject at least one of the 11 such fund applications. In recent weeks, the price of Bitcoin has surged to over $47,000 due to the expected approval by regulatory agencies, reaching its highest level in about two years.

The approval process is divided into two steps: the SEC approves the 19b-4 filings submitted by the exchanges, outlining the rule changes allowing the trading of new category funds, then approves the registration statements of the asset management companies, and finally the funds can start trading.

Here are four possible scenarios that may occur tomorrow:

Simultaneous approval of all 11 applications

The deadline on Wednesday only applies to the first applicants: Cathie Wood's ARK Investment Management and the joint venture of cryptocurrency asset management company 21Shares. However, cryptocurrency investors and ETF analysts generally believe that the SEC will simultaneously approve all 11 applications to avoid a monopoly situation.

The first-mover advantage has been a common phenomenon in the ETF industry for years. For example, the first futures-based Bitcoin ETF - ProShares Bitcoin Strategy ETF - launched in October 2021 with trading volume exceeding $1 billion on the first day, far surpassing its competitors launched a few days later. It remains the largest Bitcoin futures ETF, managing $2 billion in assets.

If all funds are approved at once, a fierce fee war is expected to erupt in the market. Some asset management companies are emulating traditional finance in a cost battle, while others are ramping up their marketing efforts.

The agency has previously postponed its decision on ARK's application three times.

Simultaneous rejection of all 11 applications

Although unlikely at this stage, the SEC may reject all 11 spot Bitcoin ETFs. In the past, the agency has repeatedly prevented the issuance of such funds, citing the susceptibility to fraud and market manipulation.

However, if the SEC rejects this round of applications, it must present a completely different reason. In August, the federal appeals court ruled that the SEC must reconsider the application from cryptocurrency asset management company Grayscale Investments to convert its trust funds into spot Bitcoin ETFs. A circuit judge stated that given the approval of Bitcoin futures ETFs, the SEC's rejection of Grayscale's proposal was "arbitrary and capricious."

A completely split decision

The SEC can approve or reject certain applications while deferring decisions on others.

In recent months, asset management companies and exchanges have been updating their filings to incorporate feedback from SEC staff. In theory, the U.S. Securities and Exchange Commission can reject applications that do not follow its guidance while approving those that do.

Alternatively, if the SEC believes that the latest round of adjustments to the applications is still insufficient, the agency may reject ARK's application and defer decisions on other applications to the next deadline.

The SEC may also require ARK to temporarily withdraw its application and reject other applications for new reasons.

Approval of exchange filings, postponement of asset management company's S-1/S-3 filings

As there is no precedent for the SEC to approve nearly a dozen ETFs holding the same asset at once, it is uncertain whether the SEC will choose to approve the exchanges' 19b-4 filings or make the asset management companies' S-1 or S-3 filings effective first.

The SEC's Division of Trading and Markets is responsible for reviewing the exchanges' 19b-4 filings. The Division of Corporation Finance is responsible for reviewing the asset management companies' S-1 and S-3 filings.

The deadline on Wednesday is for the review of the 19b-4 filings submitted by Cboe on behalf of ARK and 21Shares, which means that the two divisions of the agency may work on different timetables, potentially leaving the funds in limbo if the registration statements are not declared effective.

ETF analysts have indicated that they expect these two divisions to potentially coordinate to ensure approvals occur around the same time.

Some content referenced from: The Wall Street Journal "SEC’s Decision on Spot Bitcoin ETFs Could Go a Few Different Ways"

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。