Growing Interest in Bitcoin ETF :
There has been a growing interest among major financial institutions in launching bitcoin exchange-traded funds (ETFs).
Fidelity, an asset management company, is reportedly preparing to submit an application for a spot bitcoin ETF, joining other big money managers who have recently filed similar applications. BlackRock, WisdomTree, Invesco, VanEck, and Bitwise are among the firms that have taken this step, resulting in a surge in the price of bitcoin, reaching a one-year high of over $31,000 on June 23.
Potential Impact on the Crypto Market
Furthermore, the potential approval of bitcoin ETFs carries significant implications for the crypto market. If approved, it could attract institutional investors and high-net-worth retail traders to participate in the cryptocurrency space.
While futures-based bitcoin ETFs have been permitted since October 2021, previous applications for spot bitcoin ETFs have been rejected due to concerns about market manipulation.
However, the involvement of major players like BlackRock and Fidelity in filing for spot bitcoin ETFs has generated optimism among industry analysts, who believe that their expertise and custodial services could pave the way for broader acceptance of these investment vehicles.
Major Institutions Pursuing Spot Bitcoin ETF Shifted Sentiments
Additionally, the recent filings for bitcoin ETFs have had a positive impact on market sentiment. The crypto market has faced challenges, including the collapse of FTX exchange and regulatory scrutiny against leading platforms such as Binance and Coinbase.
However, the news of major institutions pursuing spot bitcoin ETFs has shifted sentiment as investors and speculators view these filings as a vote of confidence in the cryptocurrency space.
Institutions like BlackRock and Fidelity, known for their expertise and trusted services provide reassurance to global consumers and may encourage wider adoption of cryptocurrencies.
SEC-Grayscale Lawsuit – Fraud Prevention in Futures-Based Bitcoin ETF
Moreover, it’s worth noting that the SEC is currently facing a lawsuit filed by Grayscale Investment. The lawsuit challenges the SEC’s rejection of Grayscale’s application to convert its flagship spot Grayscale Bitcoin Trust into an ETF.
The outcome of this case, expected by the end of summer, is crucial as it revolves around the argument that SEC has previously approved surveillance agreements for fraud prevention in futures-based ETFs. Grayscale contends that similar measures should apply to spot funds, given that both spot and futures funds rely on bitcoin’s price.
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