BTC ETF Drama Reaches Climax As Deadline Fast Approaches

The United States Securities and Exchange Commission (SEC) initiated the publication of notifications regarding updates on spot Bitcoin ETFs on January 8th, 2023. By 10:45 P.M. UTC, the national securities exchange page on the SEC website displayed modifications to eight 19b-4 filings outlining proposed rule adjustments. Approximately a dozen applicants are presently seeking approval for a spot Bitcoin ETF, indicating the potential for additional amendments in the future.

Getting Closer

Among the aforementioned revised filings, six pertain to proposed rule modifications for the listing and trading of ETFs by WisdomTree, VanEck, Ark Invest, Franklin Templeton, Fidelity, and Invesco Galaxy on the Cboe BZX exchange. Another amendment involves a proposed rule change for NASDAQ to list and trade the Valkyrie Bitcoin ETF. Yet another addresses a proposed rule change for NYSE Arca to list and trade the Hashdex ETF.

The recent amendments largely address prior concerns, including the size of relevant markets, the inclusion of surveillance-sharing agreements, and the prevention of market manipulation. Each notice indicates that the exchanges submitted the relevant amendment to the SEC on Friday, January 5th. Earlier reports also indicated a similar timeline in anticipation of expected approvals around Wednesday, January 10th.

Amendment Details

On January 8th, several spot Bitcoin ETF applicants also submitted amended registration statements, including various forms such as the 8-A12B. Moreover, the latest S-1 update by BlackRock notably underscores the absence of immediate in-kind creations and redemptions, which could have facilitated certain ETF transactions using Bitcoin instead of cash.

The timing of the In-Kind Regulatory Approval is uncertain, and there is no assurance that NASDAQ will receive approval in the future. If NASDAQ obtains In-Kind Regulatory Approval and the Sponsor opts for in-kind creations and redemptions, the Trust will notify the beneficial interest owners of the Shares.

Additionally, S-1 registration statements by BlackRock and other firms also incorporate new details, including fee and seed funding information. Most firms submitted nearly finalized S-1 amendments on or before the December 29th, 2023 deadline. Consequently, the latest amendments do not substantially alter the structure of each application but primarily provide additional details.