The first Bitcoin spot ETF in the United States takes another step forward. The U.S. Securities and Exchange Commission (SEC) has recently been actively meeting with spot ETF issuers, hinting for the first time that January next year will be an important time for approval.
(Prior information:
SEC is in a hurry! 13 Bitcoin spot ETF merchants to complete modifications “by the end of the year,” BlackRock and three others have submitted)
(Supplementary background:
Countdown to Bitcoin spot ETF》After 24 meetings and 6 major modifications, what final sprints are the applicants making?)
The U.S. Securities and Exchange Commission (SEC) is currently reviewing the Bitcoin spot ETF applications submitted by 13 issuers, including BlackRock. As time goes on, more news keeps coming out.
According to a report by Reuters citing informed sources over the weekend, SEC officials met with representatives from at least 7 issuers who hope to launch such ETFs at the beginning of 2024. They were told that at least 2 companies need to submit final change applications by the 29th. It is worth noting that executives from the 2 companies that met with the SEC stated that during the meeting, the SEC informed them that any issuer who fails to complete the changes before the deadline will not be among the first potential approved Bitcoin spot ETFs in early January.
This has raised market expectations for the SEC’s approval of spot ETFs in mid-January.
It is understood that the representatives who met with the SEC include BlackRock, Grayscale, Ark Invest/21 Shares. The SEC will decide on January 10 whether to approve or reject the joint application of Ark Invest/21 Shares. Most issuers expect that the SEC may approve multiple applications in the few days leading up to the deadline.
The final change documents from these issuers are expected to cover comprehensive details, including technical specifications, fee structures, initial financing strategies, etc. Ark Invest/21 Shares is the only issuer that has disclosed fee details, setting its ETF fee at 0.8%.
SEC favors cash purchase/redemption model
According to Fox Business, large asset management companies increasingly believe that the SEC will approve the first Bitcoin spot ETF in early January. However, during a conference call with issuers last Thursday, the SEC explicitly stated that it will only consider the cash purchase/redemption model, not the physical purchase/redemption model.
SEC staff stated that any content mentioning the physical purchase/redemption model must be removed from the application documents. BlackRock, which has been seeking to adopt the physical purchase/redemption model, has accepted the SEC’s insistence on the cash purchase/redemption model in the updated documents.
David Weisberger, Co-CEO of CoinRoutes, said that from all the recently submitted modified S-1 documents, it is clear that the SEC is requiring the cash purchase/redemption model, which seems to be the final obstacle before the approval of the related ETFs. Although the approval time for the ETFs is uncertain, they are likely to be approved before the January 10 deadline next year.
Bloomberg ETF analyst Eric Balchunas also added over the weekend that the S-1 document updates requested by the SEC include an important change: the latest snapshot of their “ETF Cointucky Derby” has added the column “AP Agreement.” This change is due to the SEC’s desire to confirm detailed information about authorized participants (APs, i.e. underwriters) in the upcoming S-1 document updates (within the next 10 days).
Balchunas pointed out that this requirement may be difficult for some issuers to meet and they may not be able to obtain approval at the same time. However, the combination of “confirming the AP agreement” and “cash purchase” is likely to be the key to formal approval.