The bitcoin price has witnessed a remarkable surge, more than doubling over the past 12 months, as the cryptocurrency makes a strong comeback in the spotlight. Despite concerns surrounding the potential impact of a U.S. government and BlackRock-sponsored bitcoin spot exchange-traded fund (ETF) on the market, traders are now eagerly speculating on a possible breakthrough by BlackRock and leaked discussions from the U.S. Securities and Exchange Commission (SEC) regarding ETF applications.

Renowned ETF analyst, Eric Balchunas of Bloomberg Intelligence, recently took to Twitter to share insights on the SEC's engagement with crypto exchanges in regard to spot bitcoin ETFs. Balchunas revealed that the SEC is advising exchanges to opt for cash creates rather than in-kind transactions and has urged them to submit amendments within the next couple of weeks. While this development was not entirely unexpected, it is seen as a positive indication by those closely monitoring the progress of bitcoin spot ETFs.

Echoing Balchunas' sentiment, James Seyffart, another Bloomberg Intelligence ETF analyst, remarked that this news does not alter their prediction of a 90% likelihood of a bitcoin spot ETF approval this year. Seyffart stated, "Nothing groundbreaking. Nothing changes. But shows progress is still happening and things moving forward."

However, Gabor Gurbacs, founder of PointsVille and advisor to VanEck investment manager, expressed caution about the SEC's preference for cash bitcoin spot ETFs. Gurbacs believes this is a sign that regulators either do not fully understand or are unwilling to accept the inherent benefits of in-kind transactions in ETFs and bitcoin. He argued that in-kind transactions are more efficient, a fact well-known to ETF managers.

Following Balchunas' post, the bitcoin price experienced a sharp increase, shooting from $36,000 per bitcoin to nearly $37,000. This surge reflects the anticipation among edgy traders that the SEC may approve bitcoin spot ETF applications from Wall Street giants, who collectively manage an impressive $17.7 trillion. The timing is crucial, as market players closely watched a significant "window" for potential approval.

Boosting the bitcoin price even further, BlackRock, the world's largest asset manager handling approximately $10 trillion in client assets, recently applied to create a bitcoin spot ETF with Coinbase serving as the custodian. This move was seen as a significant development, adding to the growing anticipation surrounding the potential approval of bitcoin spot ETFs.

With the historical halving event for bitcoin looming on the horizon, which is expected to cause significant price fluctuations in the crypto market, traders and investors are closely following these regulatory developments. As the SEC engages with crypto exchanges and the possibility of bitcoin spot ETFs looms, market participants are bracing themselves for further volatility in the coming months.

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