According to Bloomberg, the crypto world is eagerly awaiting the US Securities and Exchange Commission's (SEC) decision on whether to approve a physically-backed Bitcoin ETF. The deadline for the decision is January 10th, and if approved, it would mark a significant moment for the digital-assets industry, which is still recovering from 2022's massive failures. The launch of a spot-Bitcoin ETF would help the digital-assets space become a bigger part of traditional finance, as money managers would be able to buy the ETFs for clients more easily. Bloomberg Intelligence estimates that the spot-Bitcoin ETF market has the potential to grow into a $100 billion juggernaut in time.
However, there are still some sticking points for regulators, as the final ETF details are being hashed out with issuers. One of the main contentions centers around in-kind versus cash redemptions for the funds. Regulatory officials are unlikely to allow in-kind redemptions for Bitcoin ETFs, as they don't want broker-dealers to handle Bitcoin. This means that issuers are likely working toward resolving this issue. Crypto-centric exchange-traded products have seen inflows on the back of price increases and overall industry exuberance, with crypto-centered ETFs making up the list of the 10 best-performing non-leveraged equity ETFs in the US this year. However, trading volumes remain depressed, and retail investors' presence in the market has declined, according to K33.