The ongoing effort to persuade the SEC to approve crypto investment products is gaining momentum, as several of the country’s largest asset managers—BlackRock, WisdomTree, and Invesco—have submitted applications for permission to launch a spot bitcoin ETF.
So far, the SEC has not approved any spot ETF linked to a cryptocurrency, maintaining a cautious stance towards the crypto market. Recent developments include the SEC suing crypto exchanges Coinbase and Binance for failing to register as securities trading venues.
The SEC argues that digital assets should be regulated like traditional securities and adhere to the same rules. In response, exchanges like Binance and Coinbase are advocating for a new regulatory framework tailored for digital or crypto assets.
The recent license applications have sparked speculation that the SEC may approve its first crypto ETF, resulting in a surge in bitcoin’s price, which jumped from below $25,000 to over $26,000 after BlackRock’s application was announced. Bitcoin has since exceeded $30,000 for the first time since April and only the second time this year.
This is not the first attempt by asset managers to secure SEC approval; WisdomTree’s applications have been rejected twice, in December 2021 and October 2022, due to concerns over fraud and market manipulation. In a bid to alleviate these worries, BlackRock has established a “surveillance sharing agreement” with the Chicago Mercantile Exchange futures markets. Similarly, WisdomTree has expressed readiness to enter a surveillance agreement with a US-based spot trading platform for Bitcoin.