The Advancement of Spot Bitcoin ETF Discussions in the U.S.

The Advancement of Spot Bitcoin ETF Discussions in the U.S.

The United States is currently in advanced stages of discussing the launch of spot Bitcoin exchange-traded funds (ETFs), according to unnamed sources cited by Reuters. The U.S. Securities and Exchange Commission (SEC) has reportedly started asking potential issuers of spot Bitcoin ETFs detailed and technical questions about their products. This move indicates that the regulator may soon approve the pending applications.

Between June and December 2023, 13 asset management firms, including prominent players such as BlackRock, Ark Invest, Invesco, Fidelity Digital, VanEck, and Franklin Templeton, filed applications with the SEC to launch spot Bitcoin ETFs in the U.S. Grayscale also joined the race in August after a court ordered the SEC to review its application for the Grayscale Bitcoin Trust (GBTC) to become a spot Bitcoin ETF. The court’s ruling in Grayscale’s case has raised hopes of application approvals.

Addressing Concerns

In the past, the SEC has rejected spot Bitcoin ETF applications due to concerns about market manipulation. However, sources suggest that the agency’s recent focus on detailed questions demonstrates a shift in its approach. The agency is now requesting information typically sought toward the end of an ETF application process. These questions revolve around creation and redemption mechanisms, custody arrangements, and investor risk disclosures.

Official meetings between the SEC and asset managers have progressed significantly from involving staff from various divisions to engaging employees in Chair Gary Gensler’s office. Furthermore, the frequency of information requests from the regulator has escalated from every few months to every week. This heightened level of engagement demonstrates the growing importance of spot Bitcoin ETF discussions.

As spot Bitcoin ETF discussions advance, potential issuers have been revising their filings to reflect new arrangements. BlackRock, Grayscale, and Ark Invest are among the companies adjusting their applications in response to the evolving landscape. While the crypto community eagerly awaits the SEC’s decision on Ark Invest’s filing, which is first in line on January 10, 2024, it is important to note that there is no guarantee of approval, and the SEC has not made any public statements indicating its stance. Nonetheless, the advanced nature of discussions between the SEC and asset managers has instilled optimism that all applications may receive approval within the next month.

The spot Bitcoin ETF landscape in the U.S. is progressing rapidly. The SEC’s shift in its approach, increased engagement with asset managers, and adjustments made by potential issuers all indicate a positive direction for these financial products. While the final decision remains uncertain, the growing momentum and closer collaboration between the SEC and industry participants suggest that spot Bitcoin ETFs may soon become a reality in the U.S. financial market.


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