After starting the year by hitting a 2-year high of $45,000 earlier this week, Bitcoin has retreated below the $45,000 mark. This drop can be attributed to growing apprehension concerning the approval of Bitcoin spot exchange-traded fund (ETF) proposals by the U.S. Securities and Exchange Commission (SEC).

The SEC is expected to make a decision on the proposal put forward by Ark Invest and 21Share by Jan 10, and industry watchers are eagerly awaiting the outcome.

According to Matrixport, a crypto investment services provider, the SEC will reject all applications this month. According to a note published by the company on Wednesday, all of these applications fail to meet a crucial requirement. The company also mentioned that SEC Chairman Gary Gensler believes that the industry still requires stricter compliance.

This is part of a growing trend of digital assets value tied to major policy decisions, a SEC rejection could lead to a prolonged crypto winter and an approval of an imminent bull market.

In recent years, several spot Bitcoin ETF applications have been submitted and withdrawn. However, the momentum is now growing, particularly with BlackRock, the world's largest asset management company with $8 trillion in assets under management (AUM), expressing interest in 2023. As a result, other major fund giants such as Fidelity/Wise Origin, ARK Invest, WisdomTree, and Valkyrie Investments have also refiled their applications. BlackRock’s experience in managing investment funds and its vast network in the financial sector could help create a well-structured ETF that meets the SEC’s stringent regulations. BlackRock’s sole ETF proposal rejection was a 2014 application for an active non-transparent ETF—approvals for this kind of ETF were hard to come by back then.

According to Coindesk, the SEC has been meeting with potential issuers of these ETFs, even during the busy holiday season, to finalize details, streamline the creation and redemption process, and help issuers incorporate the latest changes into their revised S-1 filing. This could signal an imminent approval.

As the wait continues, some investors are optimistic about a January spot bitcoin ETF approval, while others believe the regulator would hold off its decision for a later date or outrightly reject applications.

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