Bitcoin enthusiasts are closely monitoring the flurry of activity surrounding the applications for spot Bitcoin exchange-traded funds (ETFs) in the United States. As anticipated, multiple applicants rushed to submit their final Form S-1 amendments to the Securities and Exchange Commission (SEC) on Monday, Jan. 8.
Spot Bitcoin ETF applicants make final amendments
Valkyrie, a prominent asset manager, took the lead by filing its final S-1 amendment ahead of the widely expected approval date for the first spot Bitcoin ETFs in the U.S., set for Jan. 10. Following suit, several major players in the financial industry, including WisdomTree, BlackRock, VanEck, Invesco, Galaxy, Grayscale, ARK Invest, 21Shares, Fidelity, Bitwise, and Franklin Templeton, swiftly submitted their respective amendments. This week is shaping up to be potentially historic for Bitcoin, as these hopeful issuers work to finalize their Form S-1 amendments.
These amendments provide crucial information about the fees associated with the ETFs and reveal the identities of the market makers involved. Interestingly, some filers have made significant adjustments to the fees for trading their potential spot Bitcoin ETF products. ARK and 21Shares, for instance, disclosed in their latest S-1 that the ETF sponsor will waive its 0.25% fee for the first $1 billion in assets under management (AUM) during six months from the day of listing.
In the case of BlackRock’s Bitcoin ETF, the initial fee will be 0.2% for the first 12 months or $5 billion in AUM, followed by a 0.30% charge. Despite this fee competition, Bloomberg ETF analyst Eric Balchunas remains cautious about its impact, noting that historically, fee adjustments haven’t significantly influenced investor decisions. He emphasized that long-term investors, especially advisors, tend to focus more on regular fees. The ongoing fee competition among potential spot Bitcoin ETFs may not alter the competitive landscape dramatically.
Market strategies and the ETF landscape
Balchunas expressed skepticism about any significant shifts, considering that these ETFs essentially offer the same functionality. However, he acknowledged that the situation could evolve, stating, “We’ll see.” Beyond fee details, some filers, such as BlackRock, have also provided insights into the seeding of their spot Bitcoin ETFs. BlackRock revealed that the trust acquired 227.9 BTC with the proceeds of the seed creation baskets on Jan. 5, 2024, amounting to $10 million. The filing noted that, as of the prospectus date, these 400,000 shares represent the entirety of outstanding shares.
Similarly, ARK and 21Shares outlined their plans to purchase the initial seed creation baskets, totaling $437,000, on or around Jan. 8. The funds raised will be used to acquire Bitcoin before or at the time of the shares’ listing on the Cboe BZX Exchange. As the SEC reviews these final Form S-1 amendments, the cryptocurrency community and financial markets eagerly await the potential approval of the first spot Bitcoin ETFs in the United States. If approved, these ETFs could mark a significant milestone in the integration of Bitcoin into traditional financial markets, offering investors new avenues to participate in the cryptocurrency market.
The filing of final Form S-1 amendments by multiple applicants for spot Bitcoin ETFs indicates an active and competitive pursuit of approval. The adjustments in fees and details about seeding strategies provide insights into the strategies these issuers are employing. The cryptocurrency community is now on standby, anticipating the SEC’s decision, which could have broader implications for Bitcoin’s role in mainstream finance.