Bitcoin ETF: Here are Key Trends to Watch This Week
The broad crypto community earnestly awaits a potential spot Bitcoin ETF approval from the United States Securities and Exchange Commission (SEC), especially as the stipulated date for a decision draws closer.
Bitcoin ETF Trends to Watch
Two senior ETF analysts at Bloomberg Eric Balchunas and James Seyffart have remained in the forefront of discussions relating to the SEC’s decision on the numerous spot Bitcoin ETF applications. They both predicted that the odds of receiving approval for the new product are at 90%.
Recently, Seyffart announced that the SEC has a narrow window in which it will either approve or reject multiple Bitcoin spot ETFs in the United States. He said that this window now lies between January 5 and 10, 2024 meaning that the approval come before that time or within the week.
In response to Seyffart’s post, Balchunas urged members of the public to look out for more S-1 filing amendments this week. On the other hand, the analyst confirmed that there would be no updated 19b-4s as the regulator has asked all potential Bitcoin ETF issuers to send them offline. Crypto asset management firm Hashdex was one of the most recent firms to amend its 19b-4 filing with the SEC.
LATEST: Look for updated S-1 filings this week (which answer round two comments from SEC which I heard were exhaustive and poss final). But.. we won’t see updated 19b-4s bc SEC asked issuers to send back offline for now. Those prob be re-filed just bf approval date (see below) https://t.co/ZhtN86f0Q3
— Eric Balchunas (@EricBalchunas) December 4, 2023
BTC ETF Redemption Models
There is also the subject of the potential ETF redemption model. Notably, the agency’s Trading and Markets division had a meeting with some of the applicants for the spot Bitcoin ETF offering. In BlackRock’s meeting with the SEC, the regulator talked about the choice of “cash create” model summary or “in-kind” redemption model for the impending ETF offering.
Applicants like BlackRock seem to prefer the in-kind model to cash create, as it presents the cleanest structure for the asset manager and its end investors. Balchunas pointed out a rumor that only cash creates will be allowed in first grouping. If the rumors turn out to be true and BlackRock sticks to its choice of ‘in-kind’ redemption model, the asset manager is likely to miss out on the first grouping.
Also, it is not yet certain if Grayscale will be allowed to convert its GBTC to an ETF with the first grouping even after updating its application. Expectations are still building in anticipation of whatever the SEC’s decision will be.