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Fidelity gets listing approval despite SEC’s pending ETF decision

Fidelity’s Wise Origin Bitcoin Fund has gained conditional approval for CBOE listing under the FBTC ticker, according to an SEC filing. Notably, the decision is not an official SEC endorsement, as the federal agency is still considering the approval of the first-ever Bitcoin ETF.

The asset manager’s Form 8-A12B, disclosing details of the securities listing, was submitted to the U.S. securities regulator on Wednesday afternoon. This happened while numerous applicants were awaiting updates on their Bitcoin ETF registrations.

The Depository Trust and Clearing Company (DTCC) maintains a list of tickers for all active and pre-launch ETFs. It’s important to note that having a DTCC-listed ticker does not equate to SEC approval. The crypto industry learned this when BlackRock’s iShares Bitcoin Trust ticker was removed in October, causing market turbulence.

The SEC now has until January 10 to decide on pending Bitcoin ETF applications after recent delays. However, analysts at Bloomberg Intelligence predict an announcement between January 8 and January 10 based on their ETF activity tracking.

Whether Fidelity will be granted permission by the SEC to offer its spot in Bitcoin ETF remains uncertain. With a week left to decide, the SEC must choose to approve, reject, or delay the decision.

SEC’s hesitancy in ETF approval

The Bitcoin ETF has been highly sought after in the crypto market for the past decade. If approved, it could expose traditional investors to Bitcoin without the need for direct asset purchase and storage. This means investors could engage in Bitcoin without the complexities of cryptocurrency exchanges and wallets.

Anticipating potential ETF approval, analysts predict a surge of Wall Street investment in crypto. However, the SEC has historically been hesitant, as it has consistently rejected Bitcoin ETF applications over the past decade.

The federal agency often cited concerns about potential market manipulation in crypto markets as the reason for ETF rejections. The entry of traditional finance heavyweights like Fidelity and BlackRock has, nonetheless, altered its approach.

There is still a positive outlook on a day when even a hint of Bitcoin ETF rejection caused a market downturn. As of now, Bitcoin has marginally rebounded from its previous flash crash last Wednesday. According to CoinGecko’s latest data, the currency is now trading at $42,595.05, a 5.7 percent decrease from the previous day.

Furthermore, Vetle Lunde from K33 research foresees that approvals are likely to initiate a sell-the-news event regardless of the outcome. Lunde highlighted the vulnerable position of traders, noting substantial premiums in derivatives after three months of continuous upward momentum for Bitcoin.

“A sell-the-news event could become a self-fulfilling prophecy as a significant share of short-term market participants has eyeballed the event as an area for profit-taking,” Lunde said in a recent report.

The senior analyst suggested a 75 percent chance of a sell-the-news scenario, contrasting it with a 20 percent likelihood of approval. He acknowledged a 5 percent probability of ETF denial, stressing the ongoing uncertainty in the market.

A potential indicator of market exuberance is the surge in futures premiums on the Chicago Mercantile Exchange, reaching annualized levels of 50 percent. Institutional players expressing confidence in approval have increased their long-term exposure. This has contributed to a significant surge of over 50,000 BTC in open interest in the past three months, driven by the anticipation of Bitcoin spot ETF approvals.