There are now around a dozen spot Bitcoin ETFs that are pending approval from the SEC. There is a hard deadline on January 10th - 2 days from now - and many are expecting that we'll either see an approval or denial of most or all of the ETFs on the same day.
Will the Bitcoin Spot ETF Get Approved On Wednesday?
Since the applications are nearly identical, the SEC's hand is somewhat forced in approving all or none of the ETF Applications. Most people tend to lean toward the side of the approvals being in the bag.
My personal take is that we could see it swing either way but I also lean toward an approval. The former SEC Chair was on CNBC and said that there is nothing left to decide at this point. The approval is imminent.
If the spot ETF gets approved, I think we'll see a rapid rise in the price of Bitcoin. I expect a somewhat similar event to the stair stepping situation we saw when Elon Musk, Tesla, etc. announced large purchase of Bitcoin right after Michael Saylor. We stair stepped our way right to $65k.
I could easily see something like that happening. In my opinion, the less likely scenario is a "sell the news" event. Most of us have been anticipating this ETF for a long while. Some think that people will sell the news when the ETF is finally approved.
In my opinion, that won't happen. Obviously it could happen, but I think it's less likely.
The long-term bullish indicator of spot ETFs getting approved is far too valuable to the industry. This is a crossing the chasm moment for Bitcoin and all of crypto. It's where we start seeing legit, traditional institutional adoption of Bitcoin as an asset for short-term and long-term trading.
We haven't seen that in the largest global financial network yet. The United States has not had a spot ETF nor has it had the backing of institutions at the scale of Blackrock before.
The media attention + actual buying activity of BTC will rapidly increase post-ETF approval. That's just my opinion. It could also go the other way and perhaps sell the news takes over and we do see a decline in the price of BTC.
Regardless, I would see it as a short-term decrease in price and would probably look to buy more.
Let the Fee Wars Begin
Some filers have significantly cut fees for trading the potential spot Bitcoin ETF products. According to the latest S-1 from ARK and 21Shares, the ETF sponsor will waive its 0.25% fee during a six-month period from the day of listing for the first $1 billion in assets under management (AUM).
Many have looked at the marketing war + fee war of the Bitcoin Spot ETFs. We have to keep in mind that these are products that each of these firms are trying to push to their clients.
I care less so about the fees than the overall result of the last part of my sentence above... these firms are trying to sell this product to their current and future investors. They want them to invest so they can make fees on their investments.
Bitcoin is exciting. In 2021, we saw everyone and their grandma buying Bitcoin or at least talking about it.
It's offering something that other assets just don't offer. The volatility and unlimited upside is incredible. The entire prospect of what BTC offers people is enticing whether you're an institutional investor or retail investor.
Up until now, financial institutions warned people against buying Bitcoin. Now they are going to have their own product where they make money to convince people to buy Bitcoin. This will change the entire landscape of crypto investing and bring an inflow of capital that we have never seen before.
Seeding Bitcoin
Apart from the fees, some filers like BlackRock also included information about seeding spot Bitcoin ETFs. BlackRock stated that the trust purchased 227.9 BTC with the proceeds of the seed creation baskets on Jan. 5. 2024, for $10 million. “As of the date of this prospectus, these 400,000 Shares represent all of the outstanding Shares,” the firm said in its S-1 registration statement.
ARK and 21Shares plan to purchase the initial seed creation baskets of $437,000 “on or about” Jan. 8
Seeding Bitcoin is another interesting inflow for the asset. These ETFs are going to need to hold some amount of Bitcoin to back their ETFs. This is built-in buying pressure that happens as ETF interest grows. As more of these products launch, mature and gain adoption, more BTC is going to get spot purchased from the open market.
Overall, I am incredibly bullish on the Spot BTC ETFs. I think it will bring a new wave of investors and users to the space. It's obvious at INLEO that we've been prepping the platform for these masses to come in. We've been doing everything we can to capture value from the attention, sign ups and capital that is about to flow in.
Outside of that, I have been openly talking about my BTC and RUNE investments and how I am positioning for this influx. We're about to see a game-changing event take place in crypto. January 10th will be quite the day.
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