- Valkyrie, an institutional fund, has been accepted by the SEC for an official review of its ETF proposal.
- Short sellers, reduced in numbers, begin to hedge their short positions as the likelihood of bullish momentum rises.
The ongoing Bitcoin [BTC] ETF saga has been a subject of keen interest for institutional investors who are eagerly anticipating the SEC’s approval. Adding to the competition, Valkyrie, an institutional fund, recently joined the race to launch a Bitcoin ETF.
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With multiple players vying for approval, the outcome of the SEC’s decision remains highly anticipated and could have significant implications for the cryptocurrency market.
The race to the top gets more competitive
According to the SEC’s list, Valkyrie’s proposal for a spot Bitcoin ETF entered the official docket on 17 July.
This marks the second spot Bitcoin ETF proposal being considered by the SEC, with BlackRock’s proposal being published just a few days prior on 13 July.
Valkyrie’s current filing is their second attempt to launch a spot Bitcoin ETF in the United States, having previously proposed listing the Valkyrie Bitcoin Trust on the New York Stock Exchange in January 2021.
The proposal’s listing on the SEC’s official calendar marks the beginning of the comment period, a crucial step in the regulatory process. During this period, the public and other institutions can provide their opinions on the ETF. They can also address its potential impact on the market.
The SEC has set a deadline of 21 days from the date of filing in the Federal Register for submitting comments. Following the conclusion of the comment period, the SEC will assess the ETF proposal and may request further information from the applicants before reaching a decision.
Bears begin to shy away
The hype around ETFs and the high interest from institutions has made short sellers more cautious.
Based on recent data, short interest in the market has reached its lowest point so far this year. Additionally, for the first time, hedged short positions have surpassed unhedged short positions.
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For context, hedged short positions involve using risk management strategies, such as options or other derivatives, to offset potential losses from short positions. On the other hand, unhedged short positions are more exposed to market fluctuations and carry higher risks.
The fact that hedged shorts have overtaken unhedged shorts for the first time indicates that traders are becoming more careful and seeking ways to protect their short positions from a potential rise in BTC’s price.