SEC Gathers Spot Bitcoin ETF Applicants, January 10 Approval Coming?
- SEC holds a joint conference with spot Bitcoin ETF applicants, hinting at potential approval by January 10, 2024.
- Recent discussions center on aligning ETF applicants with the SEC’s preference for “cash creates” redemptions over “in-kind” redemptions.
- Clarification on redemption models is seen as a crucial step toward widespread approvals, aligning with insights from Bloomberg ETF analysts.
- Positive reactions observed in the cryptocurrency market, particularly the Bitcoin price, to progressive updates on potential ETF approvals.
- Approval could pave the way for major institutions like BlackRock and Fidelity to offer ETFs, leading to anticipated inflows of institutional capital into the crypto space.
The U.S. Securities and Exchange Commission (SEC) is signaling a potential milestone for the cryptocurrency market.
According to reports from FOX Business, the regulatory body is hosting a “rare joint conference” with spot Bitcoin exchange-traded fund (ETF) applicants. The anticipation is that approvals for these ETFs could be granted as early as January 10, 2024.
Joint Conference and Timing
FOX Business correspondent Charles Gasparino shed light on the SEC’s activities, revealing that a conference call was held with multiple prospective “spot” BTC ETF filers.
Gasparino emphasized the rarity of such a joint conference, indicating the high stakes involved in the decision-making process.
The SEC’s verdict will determine whether these companies can provide small investors with access to crypto assets.
“SEC is having what’s described as a rare joint conference call with prospective ‘spot’ BTC ETF filers, as its closely watched decision looms on whether to give these (companies) the green light to sell to small investors access to crypto,” Gasaprino reported.
ETF Redemption Models
A key aspect under scrutiny in recent weeks is the redemption model proposed by ETF applicants.
Notably, BlackRock and other candidates have advocated for “in-kind” redemptions, while the SEC has been urging a shift towards “cash creates” redemptions.
The recent joint conference was, in part, aimed at aligning all applicants with the SEC’s preference for cash redemptions.
“Sources that were on the call tell me it was to do with making sure everyone is doing cash creates,” reported FOX Business’s Eleanor Terrett.
“The SEC asked issuers to remove all hints of in-kind redemptions from their filings.”
Final Steps Toward Approval
The clarification of ETF redemption models is seen as a crucial step towards widespread approvals.
This development aligns with insights from Bloomberg ETF analysts, who have long indicated that the SEC could greenlight multiple spot Bitcoin ETF products simultaneously.
The consensus is that these approvals are likely to be granted in the early days of the upcoming year.
“The SEC would likely approve several spot Bitcoin ETF products at once, and that the greenlight is likely to come in the opening days of next year,” as reported by FOX Business.
Market Reaction and Institutional Capital
The cryptocurrency market, particularly the Bitcoin price, has exhibited positive reactions to the progressive updates regarding ETF approvals.
Analysts anticipate significant inflows of institutional capital if major financial institutions such as BlackRock, Fidelity, and Franklin Templeton can offer ETFs directly tied to Bitcoin.