In an interview with ETF.com on November 2, Steven McClurg, the Chief Investment Officer (CIO) of Valkyrie, expressed the possibility of regulatory approval for a spot Bitcoin ETF by the end of the month. McClurg anticipated that the U.S. Securities and Exchange Commission (SEC) would issue a second request for comments to various applicants for spot Bitcoin ETFs in the coming weeks.
This request follows the initial round of comments that began at the end of September. Valkyrie reportedly submitted an updated filing for its own proposal this week.
McClurg suggested that, after the SEC’s issuance of these new requests, they might approve the necessary 19b-4 filings by the end of November. These filings pertain to the proposed rule changes required for the listing of the spot Bitcoin (BTC) ETFs on exchanges.
McClurg also indicated that this approval timeline could potentially lead to a launch in February 2024. The SEC may require firms to provide additional details in other S-1 filings before granting final approval.
In addition to Valkyrie, Bitwise, another firm, is optimistic about its plans to introduce a spot Bitcoin ETF. Matt Hougan, CIO of Bitwise, expressed hope for their ETF launch and acknowledged potential challenges, such as concerns about market manipulation and custody.
While some applicants have sought to address market manipulation concerns through surveillance-sharing agreements, particularly with Coinbase, Bitwise remains cautious about their effectiveness. Hougan had previously made similar comments when Bitwise updated its filing in late September, indicating that such agreements might not meet the necessary requirements.
Both McClurg and Hougan provided estimates regarding the potential assets that these pending funds could attract. McClurg projected $10 billion in demand for spot Bitcoin ETFs in the four to eight weeks following their launch, while Hougan anticipated over $50 billion in inflows over a five-year period, with a focus on the later years.
Valkyrie Investments and Bitwise are among approximately ten firms vying to offer the first spot Bitcoin exchange-traded funds in the United States. The recent surge in ETF proposals was largely instigated by BlackRock, a major asset manager, which submitted its application for a spot Bitcoin ETF on June 15. Several other aspiring asset managers have modeled their applications after BlackRock’s.
Additionally, Grayscale has garnered optimism due to a legal victory that compels the SEC to review its ETF application. However, Grayscale’s plan involves converting its existing GBTC fund into an ETF, which differs substantially from most other pending applications.