On the cusp of what could be a transformative moment for cryptocurrency, experts are split on what to expect from a pending U.S. securities decision that could expand options for Bitcoin investing.

On Wednesday, the U.S. Securities and Exchange Commission (SEC) is scheduled to release its decision on whether exchanges will be able to launch exchange-traded funds (ETF) backed by Bitcoin.

The change would allow investors to have exposure to the cryptocurrency, without actually buying it. It’s believed that the changes could go a long way toward normalizing crypto investments among traditional investors.

“This is a firm mark of approval and that should drive confidence to the industry overall,” Jess Houlgrave, COO of WalletConnect and former head of crypto for Checkout.com, told BNN Bloomberg in a television interview on Monday.

“I think we will now see a big push in terms of the narrative around ETFs, the narrative around investing in Bitcoin ETFs, which will see competition.”

Houlgrave, who has already seen increasing activity in crypto wallets in advance of the decision, believes it’s too close to the deadline for the SEC to reverse course and deny the applications.

“I think it’s highly unlikely we see the SEC pull something at the eleventh hour here,” she said. “We’re already now talking about pricing and fees, which is often really the last step when we see these ETFs. So to argue that something is going to come up at the last minute is unlikely.”

Several firms, including Grayscale, Fidelity and Invesco, have already released their fee structures for spot ETF trading, a sign that financial companies believe the regulations will be approved.

Markus Thielen, head of research and strategy at Matrixport, isn’t as confident the SEC will offer a swift approval.

“We have been massively bullish last year really predicting this market … but of course, a lot has been priced in and based on our assessments, we have looked at the ETFs and the whole filings, we think that there are actually three building blocks that some investors are maybe a little bit overestimating here,” he said in a television interview.

Thielen pointed to global surveillance regulations for the Bitcoin market that the SEC could want to see before approving, as most exchanges require global cooperation. 

Thielen predicted the SEC could push the deadline approval back a couple of months in order to further study the matter.

WHAT WILL HAPPEN TO BITCOIN PRICES?

Regardless, Wednesday’s announcement will impact the price of Bitcoin.

Thielen worries if the ruling comes down against spot Bitcoin ETFs, prices of the coins could fall as much as 20 per cent in January, while an approval will shoot prices higher, but risks a quick sell-off.

“The risk-reward might be better to just hedge yourself, or go a little bit short through the options and protect yourself,” he said.

On Monday, the price of Bitcoin climbed above $47,000 for the first time since April 2022 in advance of the ruling.

With files from Bloomberg News