Bitcoin blockchain is currently seeing a meteoric rise in fees due to the highly anticipated outcome of the Bitcoin spot ETF applications getting approved by the SEC.
While no certain date has been set for this possibility apart from the January 2024 deadline, and no one is sure how many more obstacles the SEC will put against the approval process, the market is very confident that the SEC is running out of excuses and at one point will have no choice but to give up and lawfully approve these applications, especially since the recent court rulings in the Greyscale case which have certainly bolstered the crypto enthusiasts’ modes of seeing these applications getting the green light.
The anticipation has left a great effect on the Bitcoin Blockchain, which is seeing a greater demand in fees to complete transactions and at the time of writing this article, according to data from the CryptoFees, the Bitcoin Blockchain has reached $11.6 million in fees paid and the YCharts data shows that the average transaction fee is $18.66 which is a staggering 113% higher from the previous day. To compare it to the stats from the last year, this fee is 746% higher. So you can see how much the market is feeling excited for the prospects of these spot Bitcoin ETFs getting approved. This is a classic case of high demand causing the transaction fees to also rise formidably.
Ever since BlackRock filed for a spot Bitcoin ETF with the SEC, the Bitcoin price has experienced a significant rise in its value. The application filing by BlackRock was also a precursor to several other financial giants of asset management companies doing the same, which included firms like Fidelity, WisdomTree, Ark Invest, etc.
Currently, the SEC is appearing to be showing some flexibility where they have asked different firms to make adjustments to their proposals that are in line with the regulations they deem necessary to be followed, and firms have agreed to do exactly that. WisdomTree was the first in line to make changes to its Form S-1 application, followed by ARK Invest, Valkyries, 21Shares, Bitwise, and VanEck. The amendments done by these firms generated a new positive buzz in the market where the consensus was that the SEC is now at least showing some flexibility when it comes to considering approving these applications, and since the firms have so far followed the protocols, the SEC has required them to do so the ball is now in SEC’s court.
Bloomberg senior ETF analyst Eric Balchunas echoed the same sentiment when he said that the amended versions may be a response to concerns the SEC has raised:
“It means ARK got the SEC’s comments and has dealt with them all, and now put the ball back in SEC’s court.”
He also said that this is a clear sign of progress.
A spot Bitcoin ETF is an investment vehicle that closely tracks the price of Bitcoin. In this context, the spot indicates that the fund directly acquires Bitcoin as its underlying asset. This structure allows investors to engage in the Bitcoin market using their regular brokerage accounts, offering a convenient way to navigate BTC price changes without buying it on a cryptocurrency exchange. In simple words, you are not holding the crypto asset if you have purchased the ETF therefore, you can find some level of immunity from the frantic price fluctuations that is one of the main characteristics of the crypto market.
The approval of a spot Bitcoin ETF is anticipated to attract capital from institutional investors, potentially driving Bitcoin prices to new highs in the upcoming months. This investment instrument provides a means for institutions to participate in the cryptocurrency market more easily. Bloomberg analysts suggest a high likelihood, around 90%, of approval for all proposals in the same batch in January of 2024. This signals a growing interest and acceptance of Bitcoin ETFs within the broader financial landscape.
