The cryptocurrency industry is on the cusp of a major milestone with the expected approval of the first spot Bitcoin exchange-traded funds (ETFs) in the US. Valkyrie co-founder Steven McClurg predicts the SEC will give the green light as early as Wednesday, with trading kicking off Thursday morning.
Keypoints
- Valkyrie co-founder Steven McClurg predicts SEC will approve spot Bitcoin ETFs on Wednesday, with trading starting Thursday
- McClurg praises SEC Chair Gary Gensler as “good for Bitcoin” despite criticisms from some in crypto industry
- Valkyrie submitted finalized application to SEC amid frenzy of filings from competitors before deadline
- McClurg advocates for cash creation/redemption model for new Bitcoin ETFs to attract more market participants
- Valkyrie not lowering its ETF fee yet, betting its crypto expertise will appeal to investors over mainstream brands
In an interview with Fortune, McClurg displayed optimism towards the incoming spot Bitcoin ETFs. He believes SEC Chair Gary Gensler has been “good for Bitcoin,” guiding the approval of Bitcoin futures and Ether futures ETFs last year before the main event.
His outlook contrasts with some crypto industry players who believe Gensler’s stringent regulatory approach is harmful. Nonetheless, the approval of spot Bitcoin ETFs would signify growing acceptance.
Valkyrie joins around a dozen competitors racing to launch spot Bitcoin ETFs after years of delays and rejections by the SEC. The firm submitted a finalized application amid a flurry of last-minute filings before the SEC’s end-of-December deadline.
Some notes from my interview with Valkyrie cofounder @stevenmcclurg:
– Expects approval Wed and trading on Thurs
– Hasn’t heard of commission vote
– Says cash creates will allow for more market participants
– Says Gensler has been “good for Bitcoin”https://t.co/z6SaArODT6— Leo Schwartz (@leomschwartz) January 9, 2024
The SEC appears ready to greenlight multiple spot Bitcoin ETFs simultaneously to avoid conferring a major first-mover advantage to any one provider. However, major brands like BlackRock and Fidelity may benefit from widespread name recognition.
To attract investors, McClurg touts Valkyrie’s crypto native expertise compared to traditional finance giants new to the space. The provider already offers regulated ETFs focusing on Bitcoin mining stocks and Bitcoin / Ether futures.
McClurg also advocates for spot Bitcoin ETFs using a cash creation/redemption mechanism instead of the in-kind model dominant in equity ETFs. He believes cash-based products invite more authorized participants, crucial for healthy trading activity.
While rivals cut ETF fees in a bid to undercut each other, Valkyrie did not follow suit. Its 0.80% fee exceeds some competitors. McClurg wants to signal Valkyrie provides sophisticated services compared to discount offerings. The fee may change later after launch.
VanEck CEO says their spot #Bitcoin ETF will start trading on Thursday ????
Looks like tomorrow will be THE day for the approval pic.twitter.com/8hOwORMvI0
— Quinten | 048.eth (@QuintenFrancois) January 9, 2024
Ultimately, McClurg predicts each ETF provider will find an investor base drawn to their specific value proposition in the multi-billion dollar market likely to emerge. As one of the earliest advocates for spot Bitcoin ETF approval after initial rebuffs, Valkyrie aims to become a preferred choice for crypto-focused investors.
The launch of these new investment vehicles promises to expand access and fuel adoption of Bitcoin – the world’s largest cryptocurrency – among both institutional and retail players.
