Bitcoin Surges by $800 Amid Speculation of SEC Engagement with Exchanges on Spot ETFs

The value of bitcoin experienced a rapid increase of $800 in response to reports indicating that the U.S. Securities and Exchange Commission (SEC) has engaged with various exchanges regarding multiple spot bitcoin ETF applications. Eric Balchunas, a senior ETF analyst for Bloomberg, shared insights on this development through a post on the social media platform X, stating, “Hearing chatter SEC’s Trading & Markets engaged with exchanges this week on spot bitcoin ETF 19b-4s, is advising them they’d like the ETFs to do cash creates (vs in-kind), and has asked them to get in amendments in the next couple of weeks.”

Balchunas emphasized that while the SEC’s preference for cash creates over in-kind transactions is not unexpected, it is still a positive signal for the industry. He explained that opting for cash creates can alleviate constraints on broker dealers, with some bitcoin ETF applicants already planning for this approach, while others had initially chosen in-kind methods.

“This doesn’t change our 90% odds up or down but is a good sign the process is advancing, and the SEC has a path [forward] in the plumbing that they are comfortable with,” Balchunas added, highlighting the SEC’s commitment to finding a viable and secure framework for approving spot bitcoin ETFs.

The surge in bitcoin’s price, from approximately $36,000 to $36,800 within minutes after the news broke, was reported by The Block’s Price Page. Despite the sudden increase, Bloomberg Intelligence ETF Research Analyst James Seyffart noted on X, “Nothing groundbreaking. Nothing changes. But shows progress is still happening and things moving forward.” Seyffart’s observation reflects a cautious optimism in the market, acknowledging that while the recent development may not be a game-changer, it signals ongoing advancements and a forward trajectory in the regulatory landscape for bitcoin ETFs. Investors and industry participants are keenly monitoring these developments as they unfold, recognizing the potential impact on the broader cryptocurrency market.