SEC Accepts Valkyrie’s Proposal for Review, Could a Spot Bitcoin ETF Finally be Approved?

The US Securities and Exchange Commission (SEC) has taken a significant step towards the approval of a Bitcoin exchange-traded fund (ETF). Valkyrie, a Nashville-based crypto asset management firm, has had its proposal accepted for an official review by the regulatory body. The application was initially filed confidentially in June 2023, but became public knowledge on July 17 after the Nasdaq stock exchange refiled for a proposed rule change that would allow the listing of the Bitcoin ETF.

This recent development closely follows the SEC’s acceptance of another ETF application from BlackRock, a global investment management company. BlackRock submitted their application on June 15, with Coinbase as the proposed crypto custodian and BNY Mellon as the cash custodian. Following BlackRock’s move, several other companies, including WisdomTree, Invesco, and Valkyrie, also refiled their previously rejected ETF filings.

Valkyrie’s initial filing for a Spot Bitcoin ETF took place in January 2021 under the ticker BTF, with co-founder and CIO Steven McClurg expressing optimism about their chances. However, after a wait of around 11 months, the SEC rejected the filing along with applications from Wisdom Tree, Krypton, and Global X. The SEC’s concerns about market manipulation, fraud, and investor protection have been the primary reasons behind its rejection or delay of Bitcoin ETF applications.

Nevertheless, Valkyrie seized the opportunity to resubmit its Bitcoin ETF application shortly after BlackRock’s proposal. Like BlackRock, Valkyrie also enlisted Coinbase as its surveillance-sharing partner and opted for the ticker ‘BRRR’ for the ETF. Notably, unlike Valkyrie’s existing BTF fund, this new fund will be leveraged.

Now that Valkyrie’s proposal is on the SEC docket, members of the public have a 21-day window to provide comments on the proposal. Following this period, the SEC will decide whether to approve, reject, or extend its review of Valkyrie’s application. Additional information may be requested from the company before a final decision is made.

If approved, Valkyrie’s Bitcoin ETF would be the first of its kind in the US and has the potential to attract significant demand from investors. However, there is no certainty that the SEC will change its historically cautious and conservative stance on spot Bitcoin ETFs in the near future. Despite the lack of approval, the announcement of multiple Bitcoin ETF filings has already had a positive impact on the price of Bitcoin. At the time of writing, Bitcoin’s price was approximately $29,995 according to CoinMarketCap.

Overall, Valkyrie’s acceptance for official review by the SEC indicates a gradual shift towards a more favorable regulatory environment for Bitcoin ETFs in the US. However, the final decision is still awaited, and investors and industry participants will be closely watching the outcome.