cryptocurrency widget, price, heatmap
arrow
Burger icon
cryptocurrency widget, price, heatmap
News/Wall Street Titans Join Bitcoin's Embrace: Goldman Sachs Preps for ETF Boom, But SEC Verdict Looms

Wall Street Titans Join Bitcoin's Embrace: Goldman Sachs Preps for ETF Boom, But SEC Verdict Looms

Van Thanh Le

Jan 5 2024

7 months ago5 minutes read
Chibi cubic-styled robot analyzing Bitcoin and ETF data

This article comes to you with the generous support of Stake.com. Discover the excitement and rewards that await you at Stake.com with deposit bonus!

Goldman Sachs Joins the ETF Party

Few can deny the impact of Bitcoin ETFs on the financial sector, with one notable titan stepping forward: Goldman Sachs. Poised to assume an "authorized participant" (AP) mantle, it’s set to align itself with upcoming proposals from BlackRock and Grayscale. Not just a notable name, the role of an AP inherently determines the rise or fall of ETF shares, aligning them with underlying assets, bringing order to the chaotic world of cryptocurrencies.

Imagine, if you will, the formidable Goldman Sachs, a figurehead of traditional banking in the U.S., stepping beyond the fringes of its comfort zone into the fickle realm of Bitcoin. It’s a courageous leap that highlights the significant shift in the financial sector. No longer wary of the unpredictable cryptocurrency market, these financial institutions find themselves drawn to the lure of the Bitcoin ETF space, moving towards the adoption of a safe, cash-based mechanism.

This newfound intrigue into the realm of Bitcoin ETFs is undoubtedly catching trend, with U.S. banks spearheading this movement. Armed with a cash-based mechanism, their foray into handling Bitcoin showcases a crucial element in gaining SEC approval.

Bustling Wall Street with traders focused on a glowing billboard symbolizing the transformation of Bitcoin into an ETF.webp

Dominating this narrative are the forces behind such proposals: BlackRock, famed as the world’s largest asset manager, and Grayscale, operating the $26 billion Grayscale Bitcoin Trust. Notably, Grayscale aims to transform its current trust structure into a more daring ETF.

Already setting the stage for the much-anticipated transition, Grayscale has enlisted market-makers Jane Street and Virtu Financial. These firms, identified as potential APs, are gearing up for inevitable bitcoin trust conversion into an ETF.

Following this present wave of financial exploration, JPMorgan Chase, Jane Street, Cantor Fitzgerald, and now Goldman Sachs demonstrate an innate desire to venture into the Bitcoin ETF wilderness, embracing AP roles for a variety of related initiatives. It’s a bold new world with big names jumping on this rollercoaster ride, heralding a new chapter in the relationship between traditional banking and digital assets.

Fidelity Registers Bitcoin ETF with CBOE, But SEC Approval Still Hangs in the Balance

In a significant development, investment titan Fidelity has registered the shares of its Wise Origin Bitcoin Fund as securities on the Cboe BZX Exchange. This is a premeditated move in the ongoing pursuit to establish a regulated, transparent, and defensible investment vehicle for cryptocurrency.

Futuristic city at dusk with skyscrapers displaying holographic Bitcoin symbols and drones forming ETF graphs.webp

The endorsement by the U.S.-based exchange, Cboe, makes it one stride closer to becoming a reality. However, the ultimate approval is under the scrutiny of the Securities and Exchange Commission (SEC). What we now eagerly await is the decision from the SEC, which is slated to be given on or before January 10. This decision will indeed shape the future regulatory backdrop for cryptocurrency-based investment commodities within the U.S.

In shedding more light on the situation, Bloomberg's esteemed analyst James Seyffart asked investors not to confuse this development as the final nod for the ETF launch. Rather, he categorizes it as a securities registration. It’s just the first step towards achieving full approval. To get listed eventually, the ETF needs to fulfill the requirements of a 19b-4 approval as well as a finalized, approved, and effective S-1 document.

Notably, Fidelity's application isn't the only one in the waiting room. The SEC's decision on a raft of spot Bitcoin ETF applications, including those submitted by ARK Invest and the Swiss company 21Shares, is also due by January 10. In conclusion, it’s not an underestimation to say that the first ten days of 2022 hold paramount importance for the crypto-based investment industry.

Yet, even with the somewhat uncertain status of these filings, the crypto community remains undeterred and distinctly upbeat. This fervor translates into tangible optimism for the SEC's endorsement of a Bitcoin ETF, particularly prevalent amongst Polymarket traders. They project an 81% likelihood of the Bitcoin ETF approval coming to fruition by January 15, 2024. This optimistic sentiment has ballooned significantly from the previously estimated 50% probability in early December 2023.

brave_screenshot_polymarket.com.png
Source: Polymarket

This sanguine outlook permeates beyond mere speculation, it appears to have had a tangible impact on Bitcoin's value too. The leading cryptocurrency brushed aside any doubts, catapulting a striking 55% since the beginning of October. Evidently, the thrill for a potentially approved Bitcoin ETF amplifies, making it evident that the crypto community is not only watching but actively participating in the unfolding drama.

Tuttle Capital's Leveraged ETF Proposals

In an ambitious move, Tuttle Capital Management is seeking the green light from the U.S. Securities and Exchange Commission (SEC) to premier six leveraged and inverse Bitcoin ETFs. This unique proposition is charted to provide magnified returns flowing directly from a spot Bitcoin ETF, poised to revolutionize the current investment landscape.

Encompassed within the proposals are the attractive T-REX 1.5X, 1.75X, and 2X Long Spot Bitcoin Daily Target ETFs, accompanied by their T-REX 1.5X, 1.75X, and 2X Inverse Spot Bitcoin Daily Target ETFs. The motive behind these ingeniously designed ETFs is to yield daily leveraged or inverse leveraged investment outcomes, aiming to hit a high of 150% for the 1.5X product and pushing the bar to an enticing 200% for the 2X product.

Presently, in its blueprint phase, Tuttle hedges its bets on BlackRock’s prospective iShares spot Bitcoin ETF, anticipating it to be the bedrock for swap agreements. Nonetheless, in the shifting sands of digital currencies, the firm remains unflinchingly flexible, ready to recast the reference asset in the future.

By magnifying the performance of a reference spot Bitcoin ETF, these ETFs are attempting to catch a bigger wave, albeit the approval of the SEC is eagerly awaited. It's worth noting that the stakes of these funds are higher on the risk palette compared to their non-leveraged counterparts, as they tend to intensify the performance of their anchor security. 

Golden eagle with cryptocurrency-feathered wings, representing the dynamic and evolving nature of the SEC's influence.webp

Tuttle, a reputable sea captain sailing in the ETF waters, currently manages seven listed ETFs collectively valued at a hefty $96 million. Included in its portfolio are the gilt-edged T-REX 2X Long Tesla Daily Target ETF (TSLT) and the T-REX 2X Long NVIDIA Daily Target ETF (NVDX).

This bold stride taken by Tuttle is of particular interest as the SEC has yet to seal its approval on an existing spot Bitcoin ETF. With a prospective effective date set for March 18, 2024, the financial world waits with bated breath to witness the evolution of Bitcoin ETFs.

Experts' Diminished Confidence in Bitcoin ETF Approval

Bitcoin ETF approval has become a point of contention among experts, with the usual ripples of market optimism been tempered by skeptical murmurs, thereby creating an air of unpredictability about the Securities and Exchange Commission's (SEC) impending decision.

Investor sentiment, as mirrored by a significant fall in the ATM option to 52% from an earlier mark of 65%, reflects this skepticism. The market's subtle shift reveals hesitations about the likelihood of approval for a Bitcoin ETF. At the heart of the skepticism is the belief that ETF applicants have yet to entirely meet the stringent demands set by the SEC, a sentiment echoed by Markus Thielen of Matrixport and 10x Research. Despite a bullish trend seen in Bitcoin prices, Thielen remains pragmatic about the prospects of approval.

Adding his voice to the chorus, James Murphy, a lawyer and Web3 enthusiast, also articulated wariness regarding the SEC's inclination to greenlight Bitcoin ETFs. However, Murphy's outlook anticipates potential mass approvals as the SEC must be aware of legal challenges if it tries to deny this time.

June 2023 marked a notable moment in the saga with BlackRock’s Bitcoin ETF application. While it sparked renewed market interest, it also highlighted the SEC's historically noticeable reluctance to approve spot Bitcoin ETFs. Now, as multiple spot Bitcoin ETF applications lay in wait for a decision, the gaze of the global market is focused upon the SEC with bated breath and mixed expectations.

January 10 has emerged as the D-Day, a crucial deadline for the SEC to rule on this stack of biting-the-bullet cases — the spot Bitcoin ETF applications. Even as recent market tremors have unfolded, expert sentiment remains firmly anchored to the bullish side. Crypto's YouTube spokesman, Lark Davis and others put their weight behind the odds of approval, visualizing a scenario where the SEC greenlights up to 12 spot Bitcoin ETFs in one baton wave to preclude a first-mover advantage.

Adding further intrigue is Bloomberg senior ETF analyst Eric Balchunas, who cites ongoing meetings and filing amendments as the briar patch from which chances of potential approval might sprout. Despite an undercurrent of anticipation, many experts remain optimistic, expecting a future marked by approved ETFs and a more secure crypto market.

Spot Bitcoin ETFs Inch Closer: Issuers Dance with the SEC

Efforts to launch spot bitcoin ETFs are gaining momentum as firms inch forward in assuaging SEC's concerns, delicately unraveling their strategies to meet regulatory demands. Spearheading this model transformation are entities such as Grayscale, who have notably modified their ETF proposition to embrace a cash redemption model, essentially bringing their vision into alignment with SEC expectations.

Finance giants like BlackRock and Valkyrie are also contributing to this shift, playing their part by revealing authorized participants, prominent among these being Jane Street Capital and JP Morgan Securities. This move emerges as a direct response to SEC's advice, elucidating the commitment of these issuers to adhere to set guidelines.

An interesting confluence is unfolding over the treatment of hard forks diverging from the mainchain. Most issuers, including Grayscale, are inclining towards a consensus to renounce claims from such occurrences. For example, Grayscale has revised its filing to circumvent receiving tokens from hard forks or airdrops, cementing its stand on this issue.

Tranquil night sky with a Bitcoin constellation shining over a reflective ocean.webp

Reiteration of compliance, as observed in Grayscale's actions, is a trend making headway in these circles. Initially an advocate for an in-kind redemption model, Grayscale later pivoted to the SEC's advocated cash model, epitomizing their willingness to comply with SEC preferences.

Alongside these proactive measures, high-profile discussions and meetings are also shaping the canvas of spot bitcoin ETFs. Exchanges like NYSE and Nasdaq, have engaged in significant consultations with the SEC, with these forums extensively centering upon spot bitcoin ETFs, among other related issues.

However, the narrative around Ethereum ETFs continues to teeter on the brink of uncertainty. The ambiguity persists partly due to SEC's unestablished stance, unlike in the case of bitcoin ETFs, where disapproval set a distinct precedent. The path leading to a spot ether ETF, thus, remains a mystery stoking speculation amid these evident strides in the cryptocurrency arena.

Bitcoin ETF Fever Grips the Market as Regulatory Walls Wobble

Under the bright spotlight of Bitcoin, ETFs are soaring. Leading the charge, trailblazing companies Grayscale, VanEck, and ARK are positioned to pitch the first spot Bitcoin ETF in the U.S. market, with a final SEC seal of approval being the only barricade left.

Grayscale Bitcoin Trust, also known as the GBTC, is no stranger to the field. The trust currently basks in its trading glory as a commodity investment product on the unassuming OTCQX. But the NYSE Arca is where it would bloom if reshaped into a coveted spot Bitcoin ETF.

VanEck Bitcoin Trust, an intriguing candidate, would take center stage in the Chicago Board Options Exchange arena, should it successfully leap the regulatory hurdles. Meanwhile, ARK, joining hands with 21Shares, is credited with a distinct Bitcoin ETF standing in line for a chance to dance on the Cboe floor.

But what about the market's heartbeat? The Bitcoin price circuit, which recently surged past $44,000 before slightly dialing back to $43,800, reflects a spectrum of optimism, hinting at market hunger for a potentially imminent big-budget ETF.

Abstract depiction of the volatile cryptocurrency market, with colors and shapes transforming from Bitcoin to ETFs.webp

To add some drama to the unfolding masterpiece, the SEC, poised with the power to greenlight Bitcoin ETF aspirations, stands sentinel, having disapproved all preceding ambitions over a span of ten years due to investor risk qualms. Will this change? Only time will tell.

Meanwhile, the Fidelity Wise Origin Bitcoin Fund, destined to trade on the CBOe stage, eagerly awaits an encouraging nod from the SEC.

Out on the whispers street, speculators are running wild, suggesting the SEC may be orchestrating behind-the-scenes preparations for Bitcoin ETF resplendence. Five ambitious Bitcoin ETF applicants - Vaneck, Valkyrie, Fidelity, Bitwise, and Grayscale- have maneuvered their vessels, filing to park their funds as securities at the SEC.

With eyes set on listings, Grayscale’s and Bitwise’s ETF aspirations focus on the NYSE Arca. Vaneck and Fidelity point towards the Cboe BZX Exchange, while Valkyrie flirts with Nasdaq. 

fidelity-filing.webp
Source: Fidelity's filing

However, a parallel narrative cautions against equating filing as a gateway to SEC approval. The road to glory is marred with regulatory requirements, necessitating both Form S-1 and Form 19b-4 approvals for an ETF launch.

In the midst of institutional maneuverings, a disconnect arises - eager anticipation expressed through social media misinterprets filings as definitive indications of approval - falling prey to premature expectations.

As this high-stakes display unfolds, analysts and industry pundits caution against predictability, underlining the complexity and uncertainty that shroud the ETF approval process. The chessboard is set with all eyes on the king - in this case, a Bitcoin ETF. Let the games begin!

Buzzing Anticipation: Will Friday Bring Bitcoin ETF Approval?

Encryption whispers, mystic tweets and surging Bitcoin prices have social media in a game of speculations; the market anticipates that the SEC might approve a spot Bitcoin ETF as soon as Friday. The rumor mill is fueled by Grayscale’s chief legal officer who, in a cryptic tweet about "filling out some forms," ignited interesting conjectures of potential developments. 

Adding fuel to the fire, Jacquelyn Melinek, a seasoned TechCrunch reporter has fueled the speculation, citing unnamed sources close to the matter. According to Melinek's sources, several ETFs might be on the verge of receiving an approval. 

However, not everyone is onboard the optimism train. Some analysts, including Bloomberg's James Seyffart and attorney Joe Carlasare, have aired their skepticism. These experts expect the approvals to come later, possibly between January 8 and 10. 

Despite the doubts, the SEC appears to be in the final commenting stages, a clear sign that ETF issuers are getting ready to submit their final forms. The submission and approval of these forms are a de facto green light for the ETFs to commence trading.

This burning anticipation has spawned a stimulating competition among issuers- a total of 14 contenders including heavyweights like BlackRock, Valkyrie, ARK Invest/21 Shares, Bitwise, and Fidelity, vie for the coveted spot Bitcoin ETF approval.

In this cut-throat race, knowing the fee structures is elementary for an investor, given that Bitcoin will be the singular asset held by all ETFs. So far, only six of the 13 contestants have shown their cards. 

Cyberpunk cityscape with neon cryptocurrency signs and a group analyzing a holographic Bitcoin ETF map.webp

Invesco and Galaxy have turned heads by announcing a waiver of fees for the first six months and the first $5 billion in assets, a strategy that they plan to follow with a 0.59% fee. 

Fidelity, in contrast, aims to sweep the table with the lowest fee at 0.39%, leveraging its vertical integration and in-house custodian to carve out a competitive edge.

On the other hand, Ark and 21Shares, along with Valkyrie, intend to play with higher stakes, setting their fee at 0.80%.

BlackRock, a solid industry titan, holds its cards close to its chest, keeping its fee structure undisclosed. Market watchers expect their fee to be competitive, possibly turning the scale around Fidelity’s rate.

Bitcoin ETF: A Dance Between Anticipation and Uncertainty

As fluttering wings of anticipation ripple through the financial world, companies like Grayscale Investments are priming the pump for the potential green light on a groundbreaking spot Bitcoin ETF. Eyes are locked on the Securities and Exchange Commission's (SEC) forthcoming approvals, a determining factor that could stir up trade winds as early as the week following the blessed event.

The power to launch lies beneath the heavy seal of the SEC, clutching the 19b-4 and S-1 forms tightly. These forms, brimming with nitty-gritty details about fees, authorized players, and other essentials for an ETF, hold the fate of eager traders. Though approvals might march forward in staggered succession, once the ink has dried, bustling trade could burst into action by the fresh light of the following day.

Racing to the forefront, financial giants BlackRock, Valkyrie, and VanEck aren't twiddling their thumbs. BlackRock notably tagged Jane Street Capital and JP Morgan Securities as authorized participants, underlining its commitment to addressing the SEC's queries and inching closer to a coveted ETF approval.  

Elegant library with a glowing globe displaying Bitcoin ETF markets.webp

Nevertheless, the path isn't exactly paved with rose petals. The SEC, as always, wields remarkable power to buy time, opting for lengthy delays. There's notable uncertainty hovering over ETF contenders like BlackRock, whose deadlines extend into the mists of March. This murky scene conjures a convoluted roadmap where the unexpected could lurk at every turn.

Looking from the sidelines, financial advisors cast varied projections on the future Bitcoin ETF issue. Bitwise survey trombones a cautious note, revealing a mere 39% of U.S. financial advisors place their bets on a Bitcoin ETF approval by 2024. Thus playing a different tune than their ETF analyst counterparts, these advisors exude caution, adding another layer to the complex interplay.

Yet, skepticism doesn't necessarily translate into frigid investment sentiments post-approval. Sweeping away the clouds regarding the 2024 approval, an overwhelming 88% of financial advisors confess an appetite for Bitcoin investment post-ETF approval, hinting at an expected paradigm shift in investment patterns once the ETF is on board.

brave_screenshot_bitwiseinvestments.com.png
Source: Bitwise' report

However, with the drumbeat of client enthusiasm for cryptocurrencies growing louder, advisors continue to tread on thin ice. Their current capabilities to acquire crypto in client accounts stands at a modest 19%, although not short on conviction, evidenced by the ambitious 98% planning to maintain or crank up their crypto exposure in 2024.

Conclusion

The financial world eagerly anticipates the SEC's decision on Bitcoin ETFs, a pivotal moment shaping the future of cryptocurrency investments. With major players like Goldman Sachs and Fidelity involved, the outcome will either fuel further growth or impose new challenges in the evolving landscape of digital assets.

FAQs

1. What role does Goldman Sachs play in the Bitcoin ETF market?

Goldman Sachs is set to become an "authorized participant" in Bitcoin ETFs, aligning with proposals from BlackRock and Grayscale, and playing a crucial role in the potential rise of ETF shares.

2. What is the significance of the SEC's upcoming decision on Bitcoin ETFs?

The SEC's decision, expected by January 10, will determine the regulatory framework for cryptocurrency-based investments in the U.S., impacting the future of Bitcoin ETFs and the broader crypto market.

3. How are firms like Grayscale adapting to SEC guidelines for Bitcoin ETFs?

Grayscale and other firms are modifying their ETF propositions, such as adopting a cash redemption model, to align with SEC expectations and increase their chances of approval for Bitcoin ETFs.

This article has been refined and enhanced by ChatGPT.

cryptocurrency widget, price, heatmap
v 5.6.33
© 2017 - 2024 COIN360.com. All Rights Reserved.