Lucky 13? Where spot bitcoin ETF proposals stand ahead of judgment day
The SEC is mulling over 13 bitcoin ETF proposals that are continuously being updated ahead of expected rulings next month
Artwork by Crystal Le
The US Securities and Exchange Commission has not yet approved an ETF that would hold bitcoin directly, though some expect that to soon change.
The regulator is set to rule on a proposal by Ark Invest and 21Shares — and potentially similar filings by a dozen others — by Jan. 10.
Bloomberg Intelligence analysts have said they believe the chance of spot bitcoin ETF approval by that date is about 90% — an estimate former SEC executive John Reed Stark recently called “absolutely absurd.”
The issuers hoping to launch these products range from the largest asset manager in the world, to smaller, more specialized firms. A Switzerland-based fund group threw its hat in the ring as recently as last week.
A list compiled by Bloomberg Intelligence’s James Seyffart shows there are 13 proposed spot bitcoin ETFs currently in front of the SEC.
Let’s dive into each applicant and where their bids for a spot bitcoin ETF stand.
Grayscale Investments’ August court win over the SEC was one event that has catalyzed increased optimism around the approval of spot bitcoin ETFs, according to industry watchers.
Judges ruled at the time the regulator denying the conversion of the Grayscale Bitcoin Trust (GBTC) to an ETF — but allowing bitcoin futures-based ETFs to launch — was “arbitrary and capricious.” The SEC opted not to challenge this ruling.
Grayscale has said GBTC is ready to operate as an ETF upon regulatory approval, noting it would be “working collaboratively and expeditiously with the SEC.”
While the timeline for spot bitcoin ETF approval is “inherently uncertain,” Grayscale noted in a Dec. 1 blog post, the firm believes it is “a matter of when, not a matter of if.”
If Grayscale receives approval from the SEC, the company plans to immediately move GBTC from the OTCQX Market to NYSE Arca, Chief Legal Officer Craig Salm said in the post.
The simultaneous creations and redemptions — as a result of converting to an ETF — would essentially eliminate any discount or premium the shares have historically held and allow for the trust to more closely track BTC’s value, the company has said.
Ark Invest, 21Shares
Those watching the bitcoin ETF race have probably heard these firm names often. They first collaborated on a spot bitcoin fund proposal in 2021.
That application was blocked in March 2022, and the SEC denied a second attempt in January. But the companies’ latest re-filing came in April, ahead of all subsequent applications by asset management giant BlackRock and others.
The SEC is expected to rule on the latest filing by Jan. 10, a date on which some segment observers believe the regulator will also decide the fate of similar proposals by other issuers.
“We do think while we’re first in line that a number of the firms will be approved at the same time,” Ark CEO Cathie Wood said during a Wednesday webinar. “Depending on exactly how they filed, it could be that more than a half dozen are approved in the first go.”
The firms updated their bitcoin ETF application for a third time on Nov. 20, noting a sponsor fee of 0.80% of the trust’s bitcoin holdings. The fund’s shares would trade on the Cboe BZK Exchange with the ticker ARKB.
They are the financial giant that manages $9 trillion or so in assets. The company’s entrance into the spot bitcoin ETF race in June spurred many others to re-up their own bids for such a product.
BlackRock’s proposed iShares Bitcoin Trust would carry the ticker IBTC and trade on Nasdaq.
The company met several times with officials at the SEC’s division of trading and markets last month. Its Nov. 20 meeting announcement included an outline of the difference between in-kind and cash redemption models.
Authorized participants for different ETFs engage in the creation and redemption of shares using two primary methods: in-kind or cash transactions.
With in-kind transactions, APs exchange ETF shares for a corresponding basket of securities that reflects the ETF’s holdings. For in cash transactions, APs create or redeem shares in exchange for cash rather than securities.
A document from Nov. 28 — a day in which another meeting took place — noted “the SEC has certain unresolved questions around the in-kind model.”
BlackRock’s latest proposal amendment — filed on Monday — notes the trust would only accept in-kind creation and redemption requests from authorized participants and market makers that have implemented compliance programs.
Among other additions to the updated filing was the language around the firm raising $100,000 of seed capital for the fund.
Bitwise’s latest S-1 amendment came the same day as BlackRock’s. The Bitwise Bitcoin ETF — formerly proposed to be named the Bitwise Bitcoin ETP Trust — would trade on the NYSE Arca under the ticker BITB.
“Both the SEC and these issuers are working hard to iron things out,” Seyffart said in a Monday X post. “These filings are likely the result of many conversations and a lot of man hours on/between both sides.”
Bitwise Chief Investment Officer Matt Hougan has pointed to dialogue between issuers and the SEC as one reason “it does feel different this time than it did a few months ago.”
Like others, Bitwise has looked to launch a spot bitcoin ETF for several years.
The firm submitted a 100-plus page white paper in October 2021. This showed the CME bitcoin futures market led the spot market and unregulated bitcoin futures market. It published additional research demonstrating that a new bitcoin ETP is unlikely to predominantly influence CME bitcoin futures market prices.
Bitwise, in a September filing, addressed eight disagreements the SEC had with research included in the company’s previous application.
VanEck updated its S-1 form for its VanEck Bitcoin Trust Friday, marking its fifth amendment. The fund’s ticker is set to be HODL, the disclosure notes.
HODL would trade on Cboe. The latest disclosure does not disclose a fee for the proposed product.
VanEck has named Gemini Trust Company as custodian of the ETF’s bitcoin — a divergence from most others who are trusting Coinbase with that responsibility.
Matthew Sigel, VanEck’s head of digital assets research, said in June the SEC should approve all spot bitcoin ETFs at once.
Sigel and VanEck investment analyst Patrick Bush wrote Thursday they expect such products to be approved in the first quarter. They estimate inflows into spot bitcoin ETFs will amount to roughly $1 billion in the first few days and $2.4 billion within the first three months.
WisdomTree re-filed for a spot bitcoin ETF in June in the wake of BlackRock’s filing.
The firm, with roughly $98 billion in assets under management, said in the disclosure: “the bitcoin market has matured such that it is operating at a level of efficiency and scale similar in material respects to established global equity, fixed income and commodity markets.”
WisdomTree amended its bitcoin ETF application on Nov. 16. The fund’s shares would trade on the Cboe BZK Exchange with the ticker BTCW.
“It does seem like there’s been some exciting momentum, [and] we remain very focused on a spot bitcoin ETF,” Will Peck, WisdomTree’s head of digital assets, said during the company’s October earnings call. “We think it’s the best execution for the asset class in the traditional channels in the US, and we’re looking forward to continue engaging with regulators on it.”
Invesco also re-filed for a spot bitcoin ETF in June, following in BlackRock’s footsteps. The proposed ETF would list on the Cboe BZX exchange. The application was filed in partnership with Galaxy Digital, mirroring a 2021 bitcoin ETF application the two filed.
The firm made amendments to its application earlier this fall, showing that it continues to have dialogue with the regulators as they continue to mull a decision.
The ticker would be BTCO, according to a listing on the Depository Trust and Clearing Corporation.
Fidelity joined the current spot bitcoin ETF race as a re-filer, similar to Invesco and Ark. One thing that makes the proposed bitcoin ETF stand out is its custodian: Fidelity Digital Assets Services. It would not, unlike some of its competitors, use Coinbase.
Fidelity Digital Assets has offered custodian and trade execution services since 2018, making it a clear option for the firm to custody in-house.
The proposal was first filed in late June, meaning it also followed BlackRock. Back in 2021, Fidelity filed for a spot bitcoin ETF, though it was blocked by the SEC in January of last year.
The fund would trade under the ticker FBTC, according to the DTCC listing. Like Invesco, it would list on Cboe.
Valkyrie filed for a spot bitcoin ETF in late June, following — you guessed it — BlackRock. It did, however, beat Fidelity to the punch with its filing by a few days.
The firm has also filed multiple amendments to its proposal. Unlike some other applicants, Valkyrie seemed to have fun with its proposed ticker, BRRR — seemingly a reference to the sound of a money printer.
The ETF would be listed on Nasdaq alongside BlackRock’s proposed ETF. The two are the only funds who went with the Nasdaq exchange. Coinbase is, unsurprisingly, listed as the proposed custodian for the fund.
The SEC last delayed the Valkyrie application at the end of September, and its next deadline comes after the golden window laid out by Seyffart.
Valkyrie Chief Investment Officer Steven McClurg, in an interview with Schwab Network, said he believes the price of bitcoin — with both the halving and potential spot bitcoin ETF launches — could go as high as $100,000 next year.
Another re-filer. Global X filed for a spot bitcoin ETF in August after initially pursuing one in 2021.
Like others, it plans to list on the Cboe exchange, with Coinbase as a custodian. The application originally filed with the SEC listed Coinbase as a surveillance-sharing partner, in a move seen to appease regulators.
The application was delayed back in November, with the SEC saying — to no one’s surprise — that it needed more time to consider the application.
Prior to its delay, Bloomberg Intelligence analyst Eric Balchunas posted on X that discussions between the SEC and possible spot bitcoin ETF issuers about adding in cash-creations to the proposed ETFs 19b-4 filings. The discussions, Balchunas said, is a “good sign.”
Hashdex filed its 19b-4 for its spot bitcoin ETF back in September, making it one of the later applicants.
The application, however, stands out from the rest because of its unique nature. Hashdex filed in late August to hold spot bitcoin in its bitcoin futures ETF. The application updated the name to the Hashdex Bitcoin ETF “to reflect the Fund’s updated investment strategy.”
It’s one of the few not relying on Coinbase as a surveillance sharing partner. It has instead opted to use CME’s Market Exchange for Physical to “acquire and dispose” of bitcoin. It would also hold spot bitcoin, bitcoin futures contracts as well as cash and cash equivalents. It would list on the New York Stock Exchange alongside Grayscale if that fund is converted.
The updated fund would trade under its futures ticker DEFI.
The move, Seyffart posted at the end of August, “cornered” the SEC and commissioner Gary Gensler.
Financial services giant Franklin Templeton also entered the spot bitcoin ETF race in September. It seeks to list its fund on the Cboe BZX exchange. Like most of the other applicants, the firm tapped Coinbase as its custodian.
The proposed bitcoin ETF’s comment period began at the end of November, leading some to believe that the SEC’s move to start the period earlier than anticipated increases the possibility that bitcoin ETFs get a green light at the beginning of January.
The ETF, Franklin Templeton wrote in its initial proposal, would be a “series” within the Franklin Templeton Digital Holdings Trust.
Pando Asset Management
The newest entrant to the spot bitcoin ETF race, Pando filed its proposal on November 29. The ETF, if cleared by the SEC, would list on Cboe — the exchange was picked by 8 of the 13 applicants.
The firm officially filed its 19b-4 earlier this week, officially putting them in the running for an ETF.
The Swiss asset manager has multiple crypto products trading on the SIX Swiss Exchange, but this would be its first US crypto offering.
Coinbase would be the fund’s custodian, and Pando tapped BNY Mellon as the trust administrator.
With its late entrance, it’s unclear if Pando will be able to launch its ETF at the same time as, say, BlackRock or Ark if they get the go-ahead from the SEC.
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