Bitcoin prices are near $44,000 and excitement is pouring into the space again. That’s largely due to the focus on the potential launch of spot bitcoin ETFs in January. Here is an update on what we know so far and what this could mean for the crypto ETF world. This includes crypto equity ETFs, which have fallen out of favor despite significantly high YTD returns.
- Spot bitcoin ETFs will potentially be launched in a month. The Ark 21Shares Bitcoin ETF’s (ARKB) final approval deadline with the SEC is January 10. It is widely expected that the SEC will approve its application (along with spot bitcoin ETF filings).
- The SEC has been active in its discussions. For the past few weeks, the SEC has been commenting on issuer filings and issuers have been updating their S-1s. While this is a normal part of the filing process, it illustrates that there has been progress toward approval.
- SEC has also met with issuers to discuss regulatory specifics. More recently, the SEC has met with issuers like BlackRock and Grayscale. Topics focused on regulatory specifics like BlackRock’s proposed in-kind creation and redemption model (where investors can redeem shares directly for bitcoin). The SEC has pushed for a cash creation and redemption model, which is safer from a regulatory standpoint. BlackRock has made some revisions to its model but has kept it as an in-kind model. While there may be some continued back-and-forth discussion, I don’t think this will be a huge roadblock to approval by January.
- There are currently about 13 issuers in line for a spot bitcoin ETF. These include conversions like the Grayscale Bitcoin Trust (GBTC) and strategy changes like the Hashdex Bitcoin ETF (DEFI) in addition to 11 new filings and refilings. Most of these issuers are already active in the crypto ETF space. They either have a bitcoin or ether futures ETF product or a crypto industry ETF product.