There are two anticipated events currently building hype for Bitcoin (BTC). These are the anticipated mass approval of spot exchange traded funds (ETFs) based on the cryptocurrency and its coming halving. However, there are other bigger things outside of the US that could also pump it on a larger scale.
SEC Sets Deadline for Spot Bitcoin ETF
Before anything else, let’s address the elephant in the room, and that’s the US Securities and Exchange Commission (SEC) recently calling a meeting with all spot Bitcoin ETF applicants. The joint conference centers on adopting an In-Cash Redemption mechanism for their ETF models instead of the In-Kind Redemption system preferred by financial institutions.
So far, most of them seemed to have already complied with the regulator’s previous recommendations to iron out the kinks in their requests. Only BlackRock and Grayscale are holding onto their original proposal by offering In-Kind as an alternative, arguing that it’s more efficient and attractive to investors than In-Cash. Furthermore, the SEC reportedly advised the financial institutions to finalize and submit their cash redemption model before the end of the year.
All these point to the agency fast-tracking everything related to the ETF applications, which reinforces the narrative that it may be looking to lay down its decision soon. Experts predict the decision to be announced by January 10.
There are also other things happening elsewhere that could potentially drive up Bitcoin adoption.
China Changes Crypto Stance
China banned cryptocurrencies in 2021 due to their perceived risks to national security and social stability. It ordered a crackdown on transactions, exchanges, and mining involving crypto in the mainland. This consequently contributed to the long bear market in the past two years.
The giant Asian nation’s decision was further backed by the collapse of Tether and FTX in 2022. Despite its strict enforcement, China has taken great strides in blockchain adoption and has displayed a softer stance on Hong Kong’s bid to become a global crypto hub.
The country seems to be flipping its position on cryptocurrencies though based on the People’s Bank of China’s (PBoC) latest report. The document explained that cryptocurrencies have limited reach in traditional finance (TradFi) and that their market only accounts for 1% of the global arena. The same paper asked various governments to come up with the “same business, same risks, same supervision” approach in crypto regulation.
Nigeria Lifts Crypto Ban
Nigeria, another country resisting cryptos since 2021, also made a U-turn on its policies. Similarly, the Western African giant’s central bank is now recognizing that its previous stance on the matter is already getting outdated due to the growing demand and adoption of these digital assets.
“However, current trends globally have shown that there is a need to regulate the activities of virtual assets service providers (VASPs) which include cryptocurrencies and crypto assets,” said the Central Bank of Nigeria (CBN) on December 22. “Following this development, the Financial Action Task Force, FATF, in 2018 also updated its Recommendation 15 to require VASPs to be regulated to prevent misuse of virtual assets for ML/TF/PF.”