SEC would be able to approve spot BTC ETF if it implements this single method

Bloomberg’s famous exchange-traded fund (EFT) analysts, Eric Balchunas and James Seyffart said that if the United States Securities and Exchange Commission (SEC) implements a proposed rule change, it would act as a catalyst for the regulator approving a spot Bitcoin ETF in the coming year.

Balchunas went on Twitter this Thursday to note that if the SEC approves the amendment to modify the definition of “exchange” suggested in January, crypto platforms could easily fall under the SEC’s regulatory system. The regulation change would update the Exchange Act to include platforms “that make available for trading any type of security,” which appears to include cryptocurrencies, making them more appealing to the regulator. 

New note out on why we think spot bitcoin ETFs will get approved in early Summer 2023. The SEC is proposing to expand the definition of "exchange" which would bring crypto platforms under SEC reg. After that (which could take a year) look for ETFs to get green light via @JSeyff pic.twitter.com/TtFgFXrJ8h

— Eric Balchunas (@EricBalchunas) March 24, 2022

Balchunas and Seyffart said that under this definition modification, which is expected to get finalized between November of this year to May 2023, the SEC would be able to approve spot crypto ETFs including those connected to BTC.

Despite permitting several investment vehicles tied to Bitcoin futures in 2021, the regulatory body has so far dismissed all rule amendments allowing for the launching of spot Bitcoin ETFs on exchange platforms.

Continuous delay on the decision over ETF

In 2022, it first delayed the decision on whether to approve or disapprove Grayscale’s ETF, after which it also pushed dates for the decision on WisdomTree’s and One River’s spot BTC ETF applications.

Many lawmakers and industry executives in the United States have spoken out against the SEC’s apparent reluctance to approve a spot Bitcoin ETF. In January, the SEC commissioner also talked about the Bitcoin ETF delay and possible solutions to the problem.

Representatives Tom Emmer and Darren Soto wrote to SEC head Gary Gensler in November, questioning the grounds for the regulator’s refusal to launch shares of a spot Bitcoin ETF. During a December hearing, Bitfury CEO and former Acting Comptroller of the Currency Brian Brooks also stated that the US was “unquestionably” behind the curve when it comes to authorizing crypto ETFs.