BlackRock and others submit revised version of Bitcoin ETF application, expectations increase for simultaneous SEC approval

Expectations for simultaneous approval of Bitcoin ETFs

U.S. asset management giants BlackRock and Bitwise have submitted a revised application form (S-1 form) for a spot ETF for the crypto asset (virtual currency) Bitcoin (BTC) to the U.S. Securities and Exchange Commission (SEC). This was revealed on the 4th.

There is growing speculation that the SEC is preparing to approve the postponed listing application for Bitcoin spot ETFs all at once. Some analysts see this as a coordinated move, noting that the SEC has set simultaneous decision deadlines for multiple applications.

Bloomberg Intelligence’s James Seifert said the similar nature of the updated filings suggests discussions may be moving forward.

BlackRock’s filing adds new language on how trust custodians monitor for abnormal price movements and anti-money laundering, and also includes an audited statement from PricewaterhouseCoopers.

Additionally, “The Sponsor and the Trust will use known third-party service providers, such as authorized participants, market makers, prime brokers, Bitcoin custodians, etc., who are suitable for the due diligence process to ensure that the Sponsor or its affiliates have a thorough KYC process.” The text also states, “We will only do business with.”

connection:US SEC solicits public comment on two Bitcoin ETF listing applications

What is included in the first approval group?

According to Eric Balchunas, senior ETF analyst at Bloomberg, the SEC’s main focus is whether to allow “in-kind creation” within Bitcoin ETFs. According to information he has received, only “Cash Creation” will be allowed in the first group.

Cash Creation uses cash to create new ETF units. This method is relatively simple, provides market liquidity, and is easy for new investors to participate. In fact, in an amendment in October, BlackRock signaled a move to raise initial liquidity (seed) for the ETF, with the latest filing revealing that amount would be $100,000 per investor. .

On the other hand, In-Kind Creation is a method in which investors provide actual Bitcoin (BTC) and issue corresponding ETF units, and a typical example is the Grayscale investment trust GBTC. .

Balciunas also said, “We do not have specific information on whether Grayscale’s application for conversion to an ETF will be approved in the first listing approval group, and the situation is unclear.”

Bitcoin ETF review list
Source: Bloomberg Intelligence

Decisions on many Bitcoin spot ETFs are currently being postponed, with two recent ETF applications, Franklin Templeton and HashDex, requiring 21 days of public comment, with deadlines of January 1, 2024. I set a period and postponed the conclusion.

Due to this measure, many ETF applications may be approved between January 5th and January 10th next year, especially on January 8th (Monday), January 9th (Tuesday), and January 10th (Wednesday). Balchunas points out.

This move is speculated to be the regulator’s intention to issue approval for all Bitcoin spot ETF applications at the same time. It is believed that the SEC may approve all applications at once to avoid giving some applicants an unfair first-mover advantage.

connection:Grayscale explains the conversion of “GBTC” to Bitcoin ETF on blog

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