By Michael Scott
The enthusiasm portrayed by the crypto community on the prospect that the US Securities and Exchange Commission (SEC) would approve a dozen applications for spot Bitcoin exchange-traded funds (ETFs). The looming approval draws increased interest and inflow of cold hard cash, mainly from institutions.
Net Inflows to Exchange-Traded Products Hit $1.5 Billion
CoinShares publication on Monday, November 28, indicated that the hope of spot Bitcoin ETF is prompting institutional investors to pour additional cash into crypto funds. The report revealed that the European digital asset management firm realized $346 million in deposits towards the exchange-traded products (ETPs) in the past week.
The net inflows to the ETPs were the highest in the past nine consecutive weeks, leaving the year-to-date deposits at $1.5 billion.
The report outlined that the deposits flowing to the Bitcoin-specific funds were estimated to be 90%, translating to $312 million from institutional investors. The report attributed the inflows and price increment that made the assets under management (AUM) in crypto funds $45 billion.
Spot Bitcoin ETF Approval Looming
The report indicated that the exchange-traded product (ETP) involves the investment vehicle whose shares are listed on the exchange. The ETP derives its unique design by tracking the performance of underlying assets such as Ethereum and Bitcoin. Also, the ETPs could track benchmarks, including commodities, currencies, stocks, and bonds.
The exchange-traded funds, such as the Bitcoin ETF, are classified under the ETP umbrella. Nonetheless, the CoinShares report outlined several differences. A spot ETF tracks the real-time Bitcoin price that none of the already-approved future Bitcoin ETFs can.
CoinShares report illustrated that the SEC has emphatically dismissed bids for the spot Bitcoin ETF in the past decade. The report cited the SEC’s reasons as vulnerability to volatility and manipulation in crypto markets risk to authorize a spot Bitcoin ETF trading.
The report by CoinShares indicated that many industry observers acknowledged the abundance of hints that the SEC would grant the long-overdue approval of the spot Bitcoin ETFs.
The report hinted at the ongoing development where SEC held talks with BlackRock and Grayscale Bitcoin Trust (GBTC) representatives in the past week. Such coincided with the commentary from SEC’s Republican Commissioner Hester Peirce, ruling out that the regulator has reasons to deny approving the spot Bitcoin ETF.
Pursuit of US Spot Bitcoin ETF Suffers Hijinks
The hope of a spot Bitcoin ETF has created the opportunity for several hijinks, evidenced by publications reporting false BlackRock Bitcoin ETF approval. The false reporting by the crypto news platform triggered a 10% price uptick in October.
A recent report saw an individual impersonate the Wall Street giant asset manager to register a falsified iShares XRP Trust. Although Larry Fink’s BlackRock and Ripple Labs dismissed the application, the latter’s native token, XRP, already surged on the news. The fake filing would attract the authorities’ attention and refer the matter to the Delaware Department of Justice for investigation.
CoinShares Reviewing Acquisition Deal of Valkyrie’s Business
CoinShares is emerging as a critical player as it is an ETP observer as it eyes approval of spot Bitcoin ETF registered. A fortnight ago, the entity announced a securing option to purchase the US-headquartered digital asset manager Valkyrie’s ETF business.
CoinShares acknowledged that it will review the deal before the January 10 deadline lapses to greenlight itit. It added that Valkyries is among the firms behind the dozen applications seeking approval of spot Bitcoin ETF alongside BlackRock, Bitwise, Ark Invest, and VanEck.
Valkyries previously recalled applying to the spot Bitcoin ETF in 2021. However, it suffered a similar consequence to the Gary Gensler-led security regulator that rejected Grayscale Bitcoin Trust (GBTC) applications.
Valkyries would resubmit the spot Bitcoin ETF applications following the BlackRock submission in June 2023. Consequently, the acquisition of Valkyrie by CoinShares would position it at the center of the US Bitcoin ETF.
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