1/8/2024

Bitcoin ETFs may get approval soon

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Key points:

  • Investment management firms, stock exchanges and the US Securities and Exchange Commission have discussed final changes to the wording of spot Bitcoin ETF applications.
  • The SEC is expected to approve S-1 applications for spot Bitcoin ETFs by Tuesday or Wednesday evening, January 10 or 11, 2024.
  • The SEC also asked issuers hoping to go live next week to prepare written requests to the regulator to expedite the ETF’s effective date.

Investment firms, exchanges, and the SEC are close to approving spot Bitcoin ETFs in the US. The three parties have been discussing final changes to the wording of the applications, which could lead to the approval of the funds as early as next week.

Issuers have been working with SEC officials to finalize the S-1 prospectus filings, which are required for each exchange-traded fund (ETF) to be approved.

Some issuers have expressed optimism that they will receive final approval for their S-1 filings by Tuesday or Wednesday of next week.

SEC Negotiation Process

The SEC has requested minor changes to the filings for spot Bitcoin ETFs. Also, it has asked issuers to make some minor changes to their filings, including disclosing fees or the identities of their ETFs’ market makers. These updates are due by 8:00 AM ET on Monday and could be made public on the same day.

In addition, regulators are working with exchanges to finalize 19b-4 filings, which outline rule changes that the SEC must approve for the launch of spot Bitcoin ETFs. On Friday, exchanges issued corrections to 11 of these orders.

The SEC has been reviewing applications for spot Bitcoin ETFs since 2013. Several asset managers have applied to launch Bitcoin ETFs, but the SEC has rejected these applications, citing concerns about market manipulation. In 2023, 14 firms, including BlackRock, Fidelity, and WisdomTree, filed for spot Bitcoin ETFs and are awaiting a decision from the SEC.

In an unusual move, the SEC has asked issuers who hope to launch their ETFs next week to submit written requests to expedite the effective date of their ETFs. Typically, regulators discuss timing with issuers informally.

Bloomberg previously reported that SEC commissioners are expected to vote on changes to Rule 19b-4, which would allow for the approval of spot Bitcoin ETFs in the US.

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