With Bitcoin surging past $35,000 and Ethereum above $1,800, the crypto market is highly anticipating the approval of the first Bitcoin and Ethereum spot ETF in the United States.
Numerous Bitcoin (BTC) and Ethereum (ETH) exchange-traded funds (ETFs) are available worldwide, with the vast majority being categorized as "futures ETFs." These allow traders to bet on the price of BTC or ETH by investing in Bitcoin or Ethereum futures contracts, which are agreements to buy or sell assets at a predetermined price at a future date.
Crypto spot ETFs, on the other hand, provide direct exposure to the underlying cryptocurrency. Traders or investors can acquire these assets at their "spot price" through a spot ETF, eliminating the need to directly handle or manage the underlying cryptocurrency — which is commonly thought of as a complex task.
The ETF holds the Bitcoin/Ethereum on behalf of the ETF shareholders within a trust, with ETF shares representing ownership of a portion of this trust.
Because these funds need to purchase actual Bitcoin from the spot market, many believe that spot ETFs are superior to futures ETFs — since they influence the real demand for Bitcoin on the spot market, and therefore impact the price of BTC.
Furthermore, the world’s largest asset manager, Blackrock, has filed an application for a spot Bitcoin ETF. With a track record of 575-1 for ETF approvals, the crypto industry is highly anticipating the potential approval of the first spot Bitcoin ETF.
Spot ETFs are traded on exchanges, like regular stocks, allowing for easy buying and selling during market hours. But as of yet, there are currently no Bitcoin spot ETFs approved in the United States.
Learn more: Bitcoin Spot vs Futures ETF: What’s the Difference?
Bitcoin Spot ETF Timelines
2023 has seen a wave of BTC spot ETF applications from major traditional financial institutions.
The SEC approval process for a Bitcoin Spot ETF starts with the ETF sponsor submitting an application. The SEC then reviews the application, publishes it for public comment, and may ask for amendments. Key dates are set for decisions, including approval, denial or delays for further review — this is typically expected for a first-of-its-kind ETF in the United States.
Ethereum Spot ETF Timelines
There has also been a wave of Ethereum spot ETF applications in recent months — these follow the same approval process as for all ETFs.
Unlike the Bitcoin spot ETFs, the timelines for Ethereum spot ETFs are more vague and less well publicized. Nonetheless, some of the filing dates for popular Ethereum spot ETFs are known and are given below.
*Grayscale Investments filed an S-3 Registration Statement to convert its Ethereum Trust to an ETF. This was announced on October 19, 2023.
Bitcoin Price Prediction If Potential Spot ETF is Approved
The approval of a Bitcoin spot ETF would be one of the most widely anticipated developments in the cryptocurrency sector, with some believing that it will lead to an enormous influx of investment from various entities.
According to a recent report by analysts at American multinational investment bank JPMorgan, Bitcoin spot ETF approvals are likely "within months." With the earliest deadline currently set for January 2024, the first approval could be less than 3 months away.
Meanwhile, Bloomberg senior analyst Eric Balchunas places the odds of a Bitcoin spot ETF approval at 75% by this year and 95% by the end of next year (2024).
With the approval of a Bitcoin/Ethereum spot ETF in the United States, the floodgates will be opened for a range of entities that have previously had little to no exposure to Bitcoin or other crypto assets. These include family offices, hedge funds, sovereign wealth funds and pension funds.
Though it is impossible to predict exactly how this will impact Bitcoin or Ethereum’s market dynamics, some analysts have attempted to run the numbers. With one analyst speculating that the major ETFs could receive upwards of $100 billion in inflows over the next two years — slightly more if you count self-managed retail positions.
Indeed, on October 16, 2023, Cointelegraph erroneously tweeted that the U.S. Securities and Exchange Commission had approved BlackRock's spot ETF application — this resulted in an instant influx of capital into Bitcoin, sending its price soaring.
Now, with high hopes that a Bitcoin and Ethereum spot ETF approval is just a matter of time, both coins have seen a dramatic uptick in value, with Bitcoin surpassing $35,000 and reaching its highest price since mid-2022.
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