Bitcoin Rally Cools US Spot ETF Decision SEC

Bitcoin consolidates after a surge past $47,000 as US ETF approval looms. Market expects approval, with Bitcoin up 172% in 12 months.

Bitcoin is currently consolidating after a significant surge past $47,000, with the anticipation of the US approving the launch of the nation's first exchange-traded funds investing directly in the world's largest digital asset. The token dipped to $46,770 after a 6.5% jump on Monday in the US, marking a 10% climb for the new year.

The crypto market is eagerly awaiting a green light for US spot Bitcoin ETFs by a Jan. 10 deadline. Prospective issuers such as BlackRock Inc., Fidelity Investments, and Ark Investment Management have updated paperwork with the Securities and Exchange Commission, and the regulator has until Wednesday to take action on at least one of the applications. Speculators are betting that the agency will announce a slew of decisions at once to avoid handing out a first-mover advantage.

If the funds are approved, the next question is how much money they will attract. Bitcoin's 172% increase in the past 12 months indicates that traders anticipate greater adoption of the digital token by mainstream investors via the ETFs.

Applicants amended forms on Monday in the US in a final push to offer spot Bitcoin ETF products more than a decade after the first attempt. Despite SEC Chair Gary Gensler's concerns about fraud and misconduct in the crypto market, the agency may have to acquiesce to the spot ETFs after losing a key legal fight against crypto asset manager Grayscale Investments LLC last year.

Critics argue that the products pose a risk for investors given the volatility and potential for illicit activity in digital assets. However, the advance in Bitcoin has lifted the digital-asset market more broadly, bolstering smaller tokens like Solana and Cardano. US crypto-linked stocks mostly rose on Monday, setting up a tailwind for Asian peers such as Japan's Monex Group and Woori Technology Investment Co. in South Korea.

Despite concerns of a potential pullback in Bitcoin if and when SEC approval lands, some analysts believe there are no signs of a "sell-the-news" event just yet. Looking past short-term price gyrations, the approval of a Bitcoin spot ETF will likely result in a greater awareness of Bitcoin powered by some of the largest names in traditional finance.