Optimism surrounding the potential approval of a U.S. spot Bitcoin exchange-traded fund (ETF) has sparked bullish price action in the cryptocurrency market in recent weeks.
But this could be just the beginning: If a spot Bitcoin ETF is approved by the U.S. Securities and Exchange Commission (SEC), it would mark a major milestone in the digital asset’s history.
A spot Bitcoin ETF would provide institutional investors with a simple and regulated way to invest in Bitcoin, which could have explosive consequences for the Bitcoin market.
Many analysts believe that a demand shock from spot Bitcoin ETFs, coupled with next year’s Bitcoin halving event, could spark a new cryptocurrency bull run.
The SEC has rejected all spot Bitcoin ETF applications so far, but there are two main factors that make the current batch different.
One of them is the participation of BlackRock, the world’s largest asset manager, which filed for a spot Bitcoin ETF earlier this year.
The second is a court ruling requiring the SEC to review its previous decision to reject Grayscale’s application for a spot Bitcoin ETF, defining the regulator’s procedures as “arbitrary and capricious.”
“Grayscale’s decision ultimately states that Bitcoin futures ETFs cannot be allowed to trade, and then argue that the same situation does not exist for spot Bitcoin ETFs,” said James Seyffart, an analyst at Bloomberg Intelligence.
Seyffart said this is why there is a 90% chance of a spot Bitcoin ETF being approved in early January.
To understand why the approval of a spot Bitcoin ETF is a big deal and its potential impact on the market, check out the full Cointelegraph report on our YouTube channel and don’t forget to subscribe!
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