The U.S. Securities and Exchange Commission’s (SEC) potential approval of spot Bitcoin ETFs as the January 10, 2024 deadline approaches is stirring excitement in the market. Sam Enzer, a partner at Cahill Gordon & Reinel, suggests that the SEC might take steps to approve spot Bitcoin ETFs before this date, marking a significant development.
Enzer points out that the SEC’s refusal to convert Grayscale Bitcoin Trust (GBTC) into a spot ETF, which was overturned by the U.S. Court of Appeals for the District of Columbia on August 29, 2023, indicates an indirect approval of spot Bitcoin ETFs. The court’s decision highlighted the SEC’s arbitrary stance in rejecting GBTC’s application.
Despite the holiday season, the SEC’s persistence in a specific redemption model for ETFs and its lack of meetings with applicants suggest that the approval process for spot Bitcoin ETFs is nearly certain. Enzer emphasizes that companies like BlackRock, Fidelity, Galaxy Digital, VanEck, and Skybridge, which have applied for spot ETFs, are competent and have been regularly meeting with the SEC.
Recent meetings indicate that the SEC is focusing on the redemption model for ETFs and that companies are in the process of signing agreements with authorized participants, a critical step towards approval.
Enzer argues that the SEC would not hold meetings during a holiday week to discuss ETF models unless it was serious about approving spot Bitcoin ETFs, hinting at a possible approval before January 10, 2024. Companies such as Blackrock, Fidelity, Franklin Templeton, and Grayscale have repeatedly met with SEC officials.
Bloomberg ETF analyst Eric Balchunas reports that applicants are nearing the final step of approval by signing agreements with authorized participants. He adds that if the SEC has clear communication regarding the cash creation model and signed agreements, it is likely to approve the ETF applications.