The tide may be turning in the battle to get US regulators on the side spot bitcoin exchange-traded funds, if recent comments from Galaxy Digital (TSX-V:GLXY) boss Mike Novogratz and Ark Invest’s Cathie Wood are anything to go by.
Quoting insiders at BlackRock (NYSE:BLK) and Invesco, two prospective bitcoin ETF managers, Novogratz made some highly optimistic predictions during Galaxy’s second-quarter investor call on Tuesday.
“It’s a big, big deal. It’s a big deal because both our contacts from the Invesco side and from the BlackRock side gets you to think that this is a question of when, not if, that the outside this is probably six months… if you had to pin the tail on the donkey audit,” he said, referring to the Securities and Exchange Commission (SEC)’s prospective regulatory approval.
Novogratz’s comments were first picked up by Eric Balchunas, a senior ETF Analyst at Bloomberg.
According to "contacts" from inside BlackRock and Invesco spot Bitcoin ETF approval a matter of "when, not if" likely in "four to six months" -- Galaxy CEO Mike Novogratz on earnings call this morning pic.twitter.com/TIhHC7xnHI— Eric Balchunas (@EricBalchunas) August 8, 2023
“We’re going to fight like cats and dogs to win market share,” Novogratz told investors.
Galaxy won’t be the only one. Cathie Wood’s Ark Invest, WisdomTree, Bitwise, VanEck, Fidelity and of course Grayscale, which has been fighting for SEC approval for years, have all signalled their intention to launch a spot bitcoin ETF once the floodgates are open.
Cathie Wood also expressed optimism earlier this week, telling Bloomberg: “I think the SEC, if it’s going to approve a Bitcoin ETF, will approve more than one at once.”
Markets watchdog the SEC has previously rejected dozens of spot bitcoin ETF applications from Grayscale and more recently BlackRock on grounds that the proposals fail to meet anti-fraud and investor protection standards.
Approval of a spot bitcoin ETF would open bitcoin to massive sums of wealth from global investors who have been reticent to allocate funds to the world’s largest cryptocurrency.
Spot bitcoin EFTs would traders to purchase or sell the asset on a traditional stock exchange during operational hours without the rigmarole of self-custody and trusting unstable crypto exchanges.
The first spot bitcoin application was filed by the Winklevoss Twins, and subsequently rejected by the SEC, in 2013.
North of the border, Canadian regulators approved the first spot bitcoin ETF in 2021, when Purpose Investments launched the Purpose Bitcoin ETF on the Toronto Stock Exchange under the BTCC ticker.