Public comments on Bitcoin ETF applications filed by Franklin Templeton and Hashdex are now being solicited by the U.S. Securities and Exchange Commission (SEC).
The SEC announced on November 28 that it is seeking public input on the proposed Bitcoin ETFs from the two firms. This development comes a fortnight after the SEC delayed its decision on these ETF applications, leading to conjecture about a potential approval in early January 2024.
James Seyffart, an ETF analyst at Bloomberg, posits that the SEC’s preliminary proceedings for these funds suggest a potential approval by January 10, 2024. He noted that the SEC’s filing only pertains to the proposed issuers’ submissions, and approval might be granted even without an immediate launch. Nonetheless, Seyffart acknowledges the possibility of rejection despite his optimistic viewpoint.
The announcement has spurred Bitcoin to touch new peaks for 2023, with the cryptocurrency last seen trading at $37,980, a 2.4% rise in 24 hours.
The SEC is now inviting interested individuals to comment on various issues, including the potential for market manipulation, the proposed funds, and the exchanges where the ETFs would be listed. The commission is also seeking opinions on the ability of exchanges to ensure adequate liquidity and the effectiveness of the ETFs’ pricing mechanisms.
Why It Matters: This move by the SEC represents a shift in its approach to Bitcoin ETFs, suggesting an openness to public input. It’s a significant step in the evolution of cryptocurrency regulations. The ETF applications by Franklin Templeton and Hashdex could set a precedent for future approvals, providing a broader range of investment options for those interested in the digital currency market. However, the concerns highlighted by the SEC, such as the potential for market manipulation and the efficacy of pricing mechanisms, underline the still-existing challenges in the cryptocurrency space.