2024: Bitcoin ETF Approval Race: Wall Street Giants' Battle - Our Two Sats (2024)

The year is 2024, and Wall Street titans are locked in a monumental clash. Their prize? The right to launch the first-ever US Bitcoin spot ETF, unlocking a potential goldmine for investors and signaling a watershed moment for the Bitcoin revolution.

As the January 10th deadline approaches, the finance world is abuzz with speculation about which Bitcoin spot ETFs will gain approval.

This move could democratize cryptocurrency investment, marking a significant leap forward in the acceptance and integration of Bitcoin into mainstream finance.

Stay tuned as we explore the contenders and their potential impact on the future of investing.

Follow James Seyffart and Eric Balchunas from Bloomberg for the best news and info on the evolving Bitcion ETF approvals.

The Players

A look at the players for the upcoming Bitcoin ETF wars!

• Grayscale ($GBTC):The 800-pound gorilla of the “crypto” investment world,Grayscale boasts the Grayscale Bitcoin Trust (GBTC),a favorite among institutions.But its conversion to an ETF remains in limbo.
• 21Shares (TBD):This Swiss powerhouse,formerly Amun AG,offers a range of ETPs on traditional stock exchanges,making them accessible to a wider investor base.
• Ark Invest ($ARKB):Cathie Wood’s innovation-focused Ark Invest,a vocal Bitcoin proponent,seeks to join the fray with its own ETF,further legitimizing the cryptocurrency in the eyes of investors.
• BlackRock ($IBIT):The world’s largest asset manager,once a Bitcoin skeptic,surprised everyone with its late entry,showcasing the growing institutional appetite for Bitcoin.
• Bitwise (BITB):This crypto-focused firm,known for its “Most Interesting Man in the World” ad campaign,aims to bring its expertise to the ETF arena.
• VanEck ($XBTF):A veteran Wall Street player with extensive commodity experience,VanEck has been pushing for a Bitcoin ETF since 2017,demonstrating its unwavering commitment.
• WisdomTree ($BTCW):Another established asset manager,WisdomTree,is exploring the Bitcoin ETF space,signaling the wider financial industry’s growing interest.
• Invesco Ltd. (BTCO):Teaming up with Galaxy Digital,this investment giant with its existing Swiss ETP offering is a formidable contender.
• Fidelity Investments ($FBTC):A long-time digital asset enthusiast,Fidelity’s entry into the ETF race is another sign of Wall Street’s Bitcoin embrace.
• Valkyrie Investments (BTF):This US-based crypto-focused firm is eager to make its mark with its own Bitcoin ETF.
• Global X ETFs ($BITS):Known for its thematic ETFs,Global X brings its expertise to the table,aiming to provide targeted Bitcoin exposure.
• Hashdex (DEFI):This Brazilian crypto asset manager adds a global perspective to the race,showcasing the international appeal of Bitcoin ETFs.
• Franklin Templeton (N/A):A latecomer to the race,this financial behemoth’s entry signifies the mainstreaming of Bitcoin as an investment asset.

Why it Matters

One reason this could be great for Bitcoins price, offering a regulated and accessible path for everyone to invest in Bitcoin. It promises to dissolve the daunting unit bias, allowing fractional investment rather than the hefty price of a whole Bitcoin.

Buying 10 shares at $25 of Blackrocks Bitcoin ETF is much easier for people to understand vs buying Satoshi’s of Bitcoin.

A Bitcoin ETF approval would be a game-changer, offering several other key benefits:

• Accessibility:ETFs provide a familiar and regulated way for investors to access Bitcoin,potentially bringing billions of dollars into the Bitcoin market.
• Legitimacy:Regulatory approval by the SEC would further legitimize Bitcoin as a valid investment asset,boosting its credibility and mainstream appeal.
• Price Stability:Increased institutional participation through ETFs could lead to greater price stability and liquidity for Bitcoin.

Predictions for Approval

With so many heavyweights in the race, predicting the winner is no easy feat. However, considering factors like regulatory experience, institutional backing, and market size, here are some possibilities:

• Grayscale:Their existing GBTC dominance and conversion efforts give them a strong edge.
• BlackRock:Their sheer size and influence on the SEC could propel them to the front.
• VanEck:Their persistent efforts and commodity expertise may finally pay off.
• Consortium Play:A joint effort by several firms could leverage their combined strengths.

Ultimately, the winner of the Bitcoin ETF race will not only reap massive financial rewards but also play a pivotal role in shaping the future of Bitcoin adoption. As January 10 approaches, all eyes are on the SEC, waiting to see which titan will claim the ultimate Bitcoin crown.

Grayscale’s Legal Tango with the SEC: A Fight for Bitcoin ETFs

Grayscale, the world’s largest digital asset manager, hasn’t just been passively waiting for the SEC to approve Bitcoin ETFs. They’ve been locked in a fierce legal battle, challenging the SEC’s stance and paving the way for the current flurry of ETF applications. Let’s unravel the story of their fight and how it shifted the game.

The Root of the Conflict

Grayscale, eager to offer a SEC-approved Bitcoin ETF, submitted an application for their Grayscale Bitcoin Trust (GBTC) to convert to an ETF in October 2021. However, the SEC rejected it in June 2022, citing concerns about the underlying Bitcoin market’s potential for manipulation and lack of surveillance-sharing agreements with regulated Bitcoin exchanges.

Grayscale Takes the Gloves Off

Undeterred, Grayscale filed a petition for review in the D.C. Circuit Court of Appeals, questioning the SEC’s reasoning. They argued that:

• The SEC had already approved similar Bitcoin futures ETFs,so denying GBTC’s conversion was inconsistent and arbitrary.
• The SEC’s concerns about market manipulation were unsupported by evidence and could be addressed through regulatory tools instead of outright denying the application.
• The demand for a regulated Bitcoin exposure product was high,and denying GBTC would harm investors.

The Court Throws a Curveball

In August 2023, the D.C. Circuit Court of Appeals delivered a significant victory for Grayscale. They did not rule on the merits of the Bitcoin ETF itself, but rather on the procedural grounds of the SEC’s decision. The court found that the SEC had not adequately explained its rationale for rejecting GBTC’s conversion while approving similar Bitcoin futures ETFs. This “arbitrary and capricious” decision meant the SEC had to re-evaluate their stance.

Impact and Moving Forward

Grayscale’s legal battle triggered a chain reaction in the Bitcoin ETF landscape:

• The SEC’s rejection was overturned,opening the door for further discussion and potential approval of other Bitcoin ETF applications.
• Numerous other major players,from BlackRock to Fidelity,entered the race,submitting their own ETF proposals.
• The court’s decision set a precedent that could influence future rulings regarding crypto regulations.

The Future Remains Unwritten

While Grayscale’s legal victory was a major step forward, the SEC could still deny their application upon re-evaluation. However, the landscape has undeniably changed. Grayscale’s fight has paved the way for a diverse range of ETF contenders, increasing the pressure on the SEC to address the growing demand for a regulated Bitcoin investment option. Whether Grayscale ultimately claims the first-mover advantage remains to be seen, but their legal tango with the SEC has undoubtedly propelled the entire Bitcoin ETF discussion into the limelight.

Remember: The situation is still evolving, and the final outcome regarding Grayscale’s ETF and others is yet to be decided. Stay informed and follow the developments to witness the next chapter in this unfolding story.

Who do you think will win the Bitcoin ETF race? Share your predictions and insights in the comments below!

We’ll be keeping a close eye on the developments and bringing you the latest updates as the race heats up. Stay tuned for further analysis and insights into this historic moment for the Bitcoin world!