Several major Bitcoin exchange-traded fund (ETF) issuers have recently engaged in discussions with the Securities and Exchange Commission (SEC), signaling an increasing likelihood of approval for their respective products. These meetings have paved the way for potential breakthroughs in the rapidly evolving world of cryptocurrency investment.
Meeting with SEC
James Seyffart, an ETF analyst at Bloomberg, reported that four different issuers held meetings with the SEC to discuss their Bitcoin product filings. The participants in these meetings included BlackRock, Grayscale, Franklin, and Fidelity.
BlackRock, one of the world’s largest asset management companies, has demonstrated unwavering commitment to gaining SEC approval for its Bitcoin ETF. This commitment is evident in its three meetings with federal regulators in as many weeks.
BlackRock has gone a step further by revising its spot Bitcoin ETF application, making it more accessible for large banks to participate. It has introduced new shares in the fund that utilize cash rather than relying solely on cryptocurrency assets.
The SEC’s decision on BlackRock’s application is expected by January 15th, with the final deadline set for March 15th. The Division of Trading and Markets and the Division of Corporate Finance, both instrumental in approval decisions, have been present at these meetings.
Fellow issuers in the race
BlackRock, other prominent ETF issuers, including Grayscale, Franklin, and Fidelity, have also engaged in discussions with the SEC. These interactions signal a collective effort to navigate the regulatory landscape and bring Bitcoin ETFs closer to reality.
Eric Balchunas, an expert in the ETF space, noted the significance of BlackRock’s third meeting with the SEC, emphasizing the anticipation surrounding the possibility of in-kind creations in the initial wave of approvals. He also raised questions about the absence of market makers in such discussions.
Spot ETF race nears the finish line
Nate Geraci, President of ETF Store, interviewed Steven McClurg of Valkyrie, who expressed optimism about the progress in the spot ETF race. McClurg stated that things were “getting very close,” with the SEC’s main concern revolving around share creation and redemption processes.
Valkyrie’s products are poised for launch, and the necessary ETF infrastructure is in place. A potential approval date is expected shortly after January 2nd, with analysts eyeing January 10th for a batch of approvals.
In addition to the issuers mentioned earlier, several other players, including Bitwise, VanEck, WisdomTree, Invesco Galaxy, and Hashdex, are also vying for a slice of the Bitcoin ETF market. The competition is fierce, reflecting the growing interest and confidence in cryptocurrency investment products.
Analyzing the impact of ETF approval
One of the key points of discussion is the potential impact of ETF approval on Bitcoin’s market. Seyffart cautioned against overestimating the demand, comparing it to the gold ETF market’s growth since 2004, which currently holds approximately $95 billion in assets.
He noted that even significant inflows into spot Bitcoin ETFs would constitute an “EXTREME outlier success case,” especially when measured over several years.