Applicants for a spot Bitcoin Exchange-Traded Fund (ETF) are racing against time to meet a deadline set by the United States Securities and Exchange Commission (SEC) for final S-1 amendments submission by December 29, as reported by Reuters based on public documents and sources familiar with the discussions. This deadline is critical for firms hoping to launch spot Bitcoin ETF funds in early 2024.
On December 21, SEC officials met with representatives from at least seven firms, including prominent names like BlackRock, Grayscale Investments, ARK Investments, and 21 Shares, all aspiring to initiate spot Bitcoin ETFs. The meeting also included representatives from exchanges such as Nasdaq and the Chicago Board Options Exchange, as well as attorneys and investment company officials, indicating the breadth of interest in the potential new product.
The SEC has warned that any investment firm failing to meet the December 29 deadline will not be part of the initial process for potential spot Bitcoin ETF approvals starting in January. Fox Business reporter Eleanor Terrett was among the first to break the news of this deadline, later confirming that all final changes to the S-1 filings must be completed by the set date.
In light of the approaching deadline, numerous spot Bitcoin ETF applicants are rushing to update their S-1 filings, opting for a cash redemption model instead of the in-kind redemptions typically associated with non-monetary payments like Bitcoin. The SEC is also reportedly requiring that these filings specify authorized participants (APs), which Bloomberg ETF analyst Eric Balchunas suggests could be the last hurdle in the approval process for Bitcoin ETF applications.
As of December 22, according to Balchunas, none of the spot Bitcoin ETF applications had an AP agreement in place, yet seven firms had definitively switched to the cash redemption model. Despite last-minute updates by many firms, Bloomberg analysts remain confident that the SEC will approve the first spot Bitcoin ETF applications by January 10.
The SEC’s firm stance on the deadline and requirements for spot Bitcoin ETF applicants underscores the regulatory challenges and the urgency with which firms must comply to be considered for early approval. The outcome of these applications could significantly impact the cryptocurrency market and the broader financial landscape.