Embarking on a Bitcoin ETF Journey
Mike Belshe, the CEO of BitGo, has expressed a budding sense of optimism regarding the approval of a spot Bitcoin (BTC) exchange-traded fund (ETF). During a recent interview with Bloomberg, he elaborated on the intriguing conversations taking place between various firms pursuing approval and the U.S. Securities and Exchange Commission (SEC). The sentiment is that we might finally be getting somewhere. However, don’t pop the champagne just yet—the road ahead is definitely going to be a bumpy ride.
Market Structure: A Critical Hurdle
Before we throw ourselves a party for approval, Belshe made it clear: improving market structure is crucial. He discussed this necessity, stating, “I think it is quite likely we have another round of ETF rejections before we get the positive news.” He highlighted that the SEC is particularly keen on distinguishing between custodial and exchange functions, meaning that firms must adhere to certain criteria before getting that coveted green light from the regulators.
The Ghost of FTX: Lessons Learned
Belshe also reflected on the specter of Sam Bankman-Fried, the infamous former CEO of FTX, who had ambitions to transform his exchange into a jack-of-all-trades. Recollecting that a mere 15 months ago, Bankman-Fried was roaming the halls of Washington D.C. pushing his multifaceted regulatory agenda, Belshe humorously noted just how fast fortunes can change in the crypto realm. After all, he touted efficiency and multi-functionality during his grand political tour, only for FTX to ultimately become a cautionary tale.
Bitcoin Fees Skyrocket
Interestingly, the buzz around a potential Bitcoin ETF has sent transaction fees soaring. On November 16, BTC blockchain fees hit an astounding $11.6 million. That’s a whopping 746% increase in average transaction costs compared to last year! This frenzy goes to show how bullish crypto enthusiasts are feeling, especially with Bitcoin holding steady near 18-month highs.
What Lies Ahead: A Waiting Game
Currently, there are 12 asset management firms anxiously awaiting news on their Bitcoin ETF applications. According to Bloomberg analyst James Seyffart, we have a 90% chance of approvals rolling in by January 10, 2024. Hold onto your hats, folks! It appears we might just be at the edge of a significant turning point in the cryptocurrency landscape.
