Race for Regulatory Approval: Asset Management Firms Pursue Spot Bitcoin ETFs
Several prominent asset management firms, including BlackRock Asset Management, VanEck, Valkyrie Investments, Bitwise Investment Advisers, Invesco Ltd., Fidelity, WisdomTree Investments, and a joint venture between Ark Investments and 21Shares, are eagerly seeking regulatory approval for the launch of exchange-traded funds (ETFs) tied to the spot price of bitcoin. Recent filings with the Securities and Exchange Commission (SEC) reveal crucial details about their arrangements with marketmakers, fueling anticipation of an imminent decision.
Market insiders suggest that issuers meeting their year-end filing revision deadlines may launch their ETFs by January 10. This date marks the SEC’s mandated deadline to either approve or reject the Ark/21Shares ETF. Sources with insights into the filing process indicate that the SEC could notify issuers of their clearance as early as Tuesday or Wednesday next week, potentially paving the way for the launch of spot bitcoin ETFs.
Bitcoin’s Soaring Value Amid SEC Expectations
The year has witnessed Bitcoin’s price more than doubling, reaching just under $42,000. Much of this surge is attributed to market expectations that the SEC will soon approve spot bitcoin ETFs. If regulators greenlight these ETFs, notifications to issuers could come as early as next week.
Firms such as Valkyrie, Ark, and 21Shares have disclosed management fees of 0.80% for their ETFs, should SEC approval be granted in the new year. Fidelity’s Wise Origin Bitcoin Fund emerges as the most cost-effective option, with fees set at only 0.39%. Invesco, while proposing a 0.59% fee, plans to waive this fee for the first six months on the initial $5 billion in assets attracted by the new fund.
A total of 14 asset managers are awaiting SEC approval for spot bitcoin ETFs, facing a history of rejections over the past decade. The SEC has expressed concerns about market manipulation and inadequate investor protection, hindering the launch of such products. Currently, the only approved cryptocurrency ETFs are tied to futures contracts on bitcoin and ethereum, traded on the Chicago Mercantile Exchange.
Earlier this month, Grayscale Investments and Hashdex submitted updates, aiming to convert existing products into spot bitcoin ETFs. Despite numerous developments, the SEC has not provided immediate responses to requests for comments on these ongoing discussions.
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