SEC suggests any Bitcoin ETF approval will come directly from the watchdog

The US Securities and Exchange Commission (SEC) issued a warning on Tuesday, urging caution in relying on unofficial sources for information about its activity in the wake of the Bitcoin price surge on Monday, which was caused by a false report about the approval of a spot ETF.

Also read: Bitcoin ETF approval odds at 70%, says analyst ahead of January deadline

SEC raises flag after false report creates frenzy

The SEC's stern message through its official X account cautioned investors to wait for the watchdog to verify information about its decisions.

"Careful what you read on the internet. The best source of information about the SEC is the SEC," The regulatory body said.

This warning follows a false report erroneously claiming that the SEC had given the green light to BlackRock's spot Bitcoin ETF application, causing Bitcoin's price to surge by around 10% in a matter of minutes.

Ryan Selkis, CEO of crypto market intelligence firm Messari, wasted no time in calling out the agency, stating "The best source of info about the SEC is the courts."

The SEC has been in court with Grayscale over its application to convert its Grayscale Bitcoin Trust (GBTC) into an exchange-traded fund (ETF). However, the agency failed to meet the October deadline for appeal, giving Grayscale an advantage.

Industry is optimistic for approval

Ark Invest's Cathie Wood expressed optimism in a recent interview with CNBC, stating that she anticipates multiple ETF approvals from the SEC. Notably, her firm is among the nine ETF applicants.

"Many people think that the fact the SEC is asking questions is a change in behavior. Therefore, hopes are rising that a number of Bitcoin ETFs will be approved," Wood said,

On October 12, Ark updated its filing in response to the SEC clarification request as the January 10 deadline for approval approaches.

Bloomberg analyst Eric Balchunas shed light on the changes, noting that Ark submitted an updated version of its spot Bitcoin ETF prospectus a few weeks after the SEC contacted issuers regarding their filings.

"There will be a few back and forths with the SEC on these small but imp details," Balchunas said, adding that the approval may not be imminent but engagement is positive.

For instance, Bloomberg Research Analyst James Seyffart highlighted that the new prospectus addresses the SEC's concerns about Net Asset Value (NAV) calculations, which are not in line with Generally Accepted Accounting Principles (GAAP).

The Bloomberg analysts believe that there is a 90% probability of the SEC approving the Ark Invest and 21Shares ETF by the January 10 deadline. This will be positive for the crypto market.