Source: Adobe / Jhonsmetal
The crypto community is on edge as the US Securities and Exchange Commission (SEC) approaches a crucial deadline for potential approval of a spot Bitcoin Exchange-Traded Fund (ETF).
The decision, scheduled for January 10, 2024, could mark a substantial entry for Bitcoin into traditional finance, although some have worried that it also paves the way for increased centralization.
December 29 deadline
Already, the SEC has reportedly set a deadline of December 29, 2023 for companies seeking to launch Spot Bitcoin ETFs to finalize their applications.
As has been widely reported in recent weeks and months, notable firms like BlackRock, Grayscale Investments, ARK Investments, and 21 Shares have engaged in discussions with the SEC, signaling widespread industry anticipation.
The December 29 deadline was confirmed by Fox Business reporter Eleanor Terrett in an X post on December 24 where she wrote that only the ETF applications that are “fully finished and filed” by that date will be considered for approval.
Confirming the date for final amendments to all S-1s by Friday the 29th. The @SECGov has told issuers that applications that are fully finished and filed by Friday will be considered in the first wave. Anyone who is not will not be considered. In addition, the filings cannot… https://t.co/syyINu1BEI
— Eleanor Terrett (@EleanorTerrett) December 24, 2023
Will multiple ETFs be approved at once?
Anticipation and speculation surround the possibility of the SEC approving multiple spot Bitcoin ETF applications collectively before the January deadline.
The expectation that the SEC will approve several applications at the same time has been shared repeatedly by analysts, including Bloomberg Intelligence’s Eric Balchunas.
As recently as on Wednesday this week, Balchunas said that the SEC is “ready to approve spot bitcoin ETFs,” and that there is now a “mad scramble” behind the scenes at ETF issuers to finalize their applications.
Only ETF applicants who have finalized their applications by December 29 will be considered for “the crucial first tranche of the race,” he wrote.
New one from me today on how just making it to the starting gate is half the battle for ETF issuers in the Cointucky Derby, it’s the race before the race, currently a mad scramble behind scenes to get signed AP agreements, a critical but not easy last step. pic.twitter.com/IF58KQthcV
— Eric Balchunas (@EricBalchunas) December 27, 2023
Cash redemption model
The involvement of major Wall Street players and the potential accessibility of Bitcoin ETFs for financial advisors and money managers have heightened excitement around the expected ETF approvals.
However, challenges remain, with the SEC favoring cash redemption models over in-kind redemptions, posing hurdles for some ETF filers.
The need to name authorized participants (AP) is another final requirement, and the absence of an AP agreement has been noted for spot Bitcoin ETF applicants by December 22.
Latest snapshot of The ETF Cointucky Derby w new column for “AP Agreement” as SEC wants AP (who is also underwriter) named in next S-1 update (coming in next 10 days). This is no easy last step, and may keep some from starting gate. AP agreement + cash creates = approval @JSeyff pic.twitter.com/e8cgCuUBLN
— Eric Balchunas (@EricBalchunas) December 22, 2023
Still, market sentiment is notably optimistic, reflected in significant gains for Bitcoin in anticipation of potential ETF approval.
For investors, SEC approval could mean enhanced accessibility to Bitcoin without the complexities of managing wallets and private keys. This ease of access might attract increased institutional and retail investment to the digital asset market.
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