A review of the latest progress on 13 spot Bitcoin ETF proposals, with the SEC possibly making a decision next month?

Original Title: Lucky 13? Where spot bitcoin ETF proposals stand ahead of judgment day

Original Source: Blockworks

Original Compilation: Mary Liu, BitpushNews

Industry insiders are confident as they await the U.S. Securities and Exchange Commission (SEC) to make a decision on spot bitcoin ETF approvals next month. Cory Klippsten, CEO of Swan Bitcoin, predicted in an interview with Bloomberg that the approval window may have narrowed down to January 8, 9, or 10, 2024.

A list compiled by Bloomberg Intelligence analyst James Seyffart shows that there are currently 13 proposed spot bitcoin ETFs submitted to the SEC.

This article will summarize the latest developments of these 13 spot bitcoin ETF proposals.

Grayscale

According to industry observers, Grayscale Investments' victory over the SEC in court in August has led to increased optimism regarding the approval of spot bitcoin ETFs.

At that time, the judge ruled that the regulator's refusal to convert the Grayscale Bitcoin Trust (GBTC) into an ETF while allowing the launch of futures-based ETFs was "arbitrary and capricious." The SEC chose not to challenge this ruling.

Grayscale stated that GBTC is ready to operate as an ETF once regulatory approval is granted and noted that it will "work quickly with the SEC."

In a blog post on December 1, Grayscale pointed out that while the timeline for spot bitcoin ETF approval is "essentially uncertain," the company believes it is "just a matter of time, not if."

Chief Legal Officer Craig Salm stated in the post that if Grayscale receives SEC approval, the company plans to immediately transfer GBTC from the OTCQX market to NYSE Arca.

The company indicated that converting to an ETF, along with simultaneous issuance and redemption, would essentially eliminate any historical discounts or premiums associated with the stock and allow the trust to more closely track the value of BTC.

Ark Invest/21Shares

Those following the bitcoin ETF race should be familiar with their names, Ark Invest and 21Shares, which first collaborated to propose a spot bitcoin fund in 2021.

The application was rejected in March 2022, and a second rejection came in February 2023, with the latest reapplication submitted in April, ahead of asset management giant BlackRock and others.

The SEC is expected to rule on the latest submitted documents on January 10, with some industry observers believing that the regulator will also decide the fate of similar proposals from other issuers on that day.

Ark CEO Cathie Wood stated, "We do believe that while we are first in line, many companies will receive approval simultaneously, and depending on how they submitted their applications, there could be more than six applications approved at once."

The two parties updated their bitcoin ETF application for the third time on November 20, noting that the management fee is 0.80% of the trust's bitcoin holdings. The fund's shares will trade on the Cboe BZK exchange under the ticker ARKB.

BlackRock

BlackRock is a financial giant managing approximately $9 trillion in assets. The company joined the spot bitcoin ETF race in June, prompting many other firms to raise their bids for such products.

The proposed iShares Bitcoin Trust will trade under the ticker IBTC on Nasdaq.

Last month, the company met multiple times with officials from the SEC's Trading and Markets Division. Its November 20 meeting announcement outlined the differences between physical and cash redemption models.

Different ETFs have authorized participants using two main methods to engage in the creation and redemption of shares: physical or cash transactions.

In a physical transaction, the AP exchanges ETF shares for a corresponding basket of securities that reflects the ETF's holdings. For cash transactions, the AP creates or redeems shares in exchange for cash rather than securities.

A document from November 28 (the same day another meeting was held) noted that "the SEC has certain unresolved issues regarding the physical model."

The latest proposal amendment submitted by BlackRock on Monday states that the trust will only accept physical creation and redemption requests from authorized participants and market makers that have implemented compliance programs.

The updated document also added information about the company raising $100,000 in seed funding for the fund.

Bitwise

Bitwise's latest S-1 amendment was released on the same day as BlackRock's. The Bitwise Bitcoin ETF (previously proposed to be named the Bitwise Bitcoin ETP Trust) will trade on NYSE Arca under the ticker BITB.

Bloomberg analysts stated, "The SEC and these issuers are working hard to resolve issues, and these documents may be the result of multiple dialogues and a significant amount of work hours between both parties."

Bitwise Chief Investment Officer Matt Hougan pointed out that the dialogue between the issuer and the SEC is "one of the reasons it feels different this time compared to a few months ago."

Like other companies, Bitwise has been hoping to launch a spot bitcoin ETF for years.

The company submitted a lengthy white paper over 100 pages in October 2021, indicating that the CME bitcoin futures market leads the spot market and the unregulated bitcoin futures market. Additional research published by the company suggested that the new bitcoin ETP is unlikely to have a major impact on CME bitcoin futures market prices.

In documents submitted in September, Bitwise addressed eight discrepancies raised by the SEC regarding research included in the company's previous application.

VanEck

VanEck updated the S-1 form for the VanEck Bitcoin Trust on Friday, marking its fifth revision. The disclosure indicated that the fund's ticker will be HODL.

HODL will trade on Cboe. The latest disclosure did not reveal the proposed product's fees.

VanEck has hired Gemini Trust Company as the ETF's bitcoin custodian—this differs from most companies that choose Coinbase as their custody partner.

Matthew Sigel, VanEck's Head of Digital Asset Research, stated in June that the SEC should approve all spot bitcoin ETFs immediately.

Sigel and VanEck investment analyst Patrick Bush wrote on Thursday that they expect such products to be approved in the first quarter. They estimate that the funds flowing into spot bitcoin ETFs in the first few days will be around $1 billion, reaching $2.4 billion in the first quarter.

WisdomTree

After BlackRock submitted its application, WisdomTree reapplied for a spot bitcoin ETF in June.

The company manages approximately $98 billion in assets and stated in its disclosure, "The bitcoin market has matured, and its operational efficiency and scale are substantively similar to those of mature global equity, fixed income, and commodity markets."

WisdomTree amended its bitcoin ETF application on November 16. The fund's shares will trade on the Cboe BZK exchange under the ticker BTCW.

Will Peck, WisdomTree's Head of Digital Assets, stated during the company's earnings call in October, "There does seem to be some exciting momentum, and we are still very focused on spot bitcoin ETFs. We believe this is the best way for this asset class to be executed in traditional channels in the U.S., and we look forward to continuing to work with regulators on this."

Invesco

Invesco also followed in BlackRock's footsteps and reapplied for a spot bitcoin ETF in June. The proposed ETF will be listed on the Cboe BZX exchange. The application was submitted in partnership with Galaxy Digital, reflecting their joint submission of a bitcoin ETF application in 2021.

The company modified its application earlier this fall, indicating that it would continue to engage with regulators as they consider their decision.

According to the list from the Depository Trust and Clearing Corporation, the ticker will be BTCO.

Fidelity

Fidelity has joined the current spot bitcoin ETF race as a reapplicant, similar to Invesco and Ark. One of the standout reasons for the proposed bitcoin ETF is its custodian: Fidelity Digital Assets Services. Unlike some competitors, it does not use Coinbase.

Fidelity Digital Assets has been providing custody and trading execution services since 2018, making it the go-to choice for in-house custody.

The proposal was first submitted in late June, meaning it closely followed BlackRock. Fidelity had previously applied for a spot bitcoin ETF in 2021 but was blocked by the SEC in January last year.

According to the DTCC's list, the fund will trade under the ticker FBTC. Like Invesco, it will be listed on the Chicago Options Exchange.

Valkyrie

Valkyrie applied for a spot bitcoin ETF shortly after BlackRock at the end of June (a few days before Fidelity).

The company has also made several amendments to its proposal. Unlike some other applicants, Valkyrie seems particularly interested in its proposed ticker BRRR—referring to "money printer."

This ETF will be listed on Nasdaq alongside BlackRock's proposed ETF. These two funds are the only ones listed on the Nasdaq exchange. Unsurprisingly, Coinbase is listed as the proposed custodian for the fund.

The SEC last delayed Valkyrie's application at the end of September, with the next deadline following the golden window proposed by Seyffart.

Valkyrie Chief Investment Officer Steven McClurg stated in an interview with Schwab Network that he believes the price of bitcoin (whether due to halving or the potential launch of a spot bitcoin ETF) could reach $100,000 next year.

Global X

Another "returnee," Global X, applied for a spot bitcoin ETF in August after initially applying for one in 2021.

Like other companies, it plans to list on the Cboe exchange, with Coinbase as the custodian. The initial application submitted to the SEC listed Coinbase as the monitoring-sharing partner, a move seen as an effort to appease regulators.

The application was delayed as early as November, with the SEC stating that it needed more time to consider the application, which was not surprising.

Before the delay, Bloomberg analyst Eric Balchunas posted on X that discussions had taken place between the SEC and potential spot bitcoin ETF issuers regarding the addition of cash creation in the proposed ETF 19b-4 application, with analysts stating that these discussions were a "good sign."

Hashdex

Hashdex applied at the end of August to hold spot bitcoin in its bitcoin futures ETF. The application was renamed Hashdex Bitcoin ETF "to reflect the fund's updated investment strategy."

It is one of the few companies that does not rely on Coinbase as a monitoring-sharing partner. Instead, it chose to use the CME's physical market exchange to "acquire and settle" bitcoin. It will also hold spot bitcoin, bitcoin futures contracts, and cash and cash equivalents. If the fund is converted, it will be listed on the New York Stock Exchange alongside Grayscale.

The updated fund will trade under its futures ticker DEFI.

Franklin Templeton

Financial services giant Franklin Templeton also joined the spot bitcoin ETF race in September. It seeks to list its fund on the Cboe BZX exchange. Like most other applicants, the company chose Coinbase as its custodian.

The comment period for the proposed bitcoin ETF began at the end of November, leading some to believe that the SEC's early start in soliciting comments increased the likelihood of bitcoin ETFs being approved in early January.

Franklin Templeton wrote in its initial proposal that the ETF would become a "series" within the Franklin Templeton Digital Holding Trust.

Pando Asset Management

As the latest participant in the spot bitcoin ETF race, Pando submitted its proposal on November 29. If approved by the SEC, the ETF will be listed on Cboe—8 out of the 13 applicants have chosen this exchange.

The company formally submitted its 19b-4 earlier this week, officially entering the ETF competition.

This Swiss asset management company has various crypto products trading on six major exchanges in Switzerland, but this will be its first issuance of a crypto ETF in the U.S.

Coinbase will serve as the custodian for the fund, and Pando has appointed BNY Mellon as the trust administrator. Due to the late application, it remains unclear whether Pando would be able to launch its ETF simultaneously with BlackRock or Ark if approved.