Bitcoin ETF: A New Reality? Deciphering SEC's Bureaucratic Moves

• Potential Approval of the Spot Bitcoin ETF in the U.S.
• Recent Developments
• SEC Timetable
• The Role of ETF Issuers
• Progress in Hong Kong
• Bitcoin's Prospects in 2024

Potential Approval of the Spot Bitcoin ETF in the U.S.

The crypto industry is rife with predictions, and one of them is the high likelihood of a Spot Bitcoin$42,260 -0.64% ETF being approved in the U.S. by January 10th. The Securities and Exchange Commission (SEC) has been actively meeting with potential issuers of these ETFs, even amidst the bustling holiday season, to finalize details, structure the creation, and direct issuers to incorporate recent changes into their revised S-1 filings.

Recent Developments

BlackRock, a major player in finance, filed its fourth amendment to its application with the SEC on December 23rd, and is expecting to seed its Bitcoin ETF with $10 million on January 3rd. However, seeding the ETF shell does not necessarily imply launch. Recent reports from Fox Business state that final amendments to all spot Bitcoin ETF applications must be completed by December 29th. The SEC will consider the applications that are fully furnished and filed by this date in the first wave.

SEC Timetable

The SEC has requested that issuers have their authorized participant agreement available in the coming days. These agreements describe who will take on the crucial task of creating and redeeming ETF shares, a central part of the ETF business. However, with Bitcoin ETF APs requiring a basic understanding of digital assets, safekeeping and custody, anti-money-laundering and know-your-customer compliance, and crypto asset order placement on behalf of clients, it's clear that not many traditional brokerages are equipped for this role.

The Role of ETF Issuers

It's evident that the SEC expects ETF issuers to have held preliminary discussions with market participants and sorted out key factors such as assigned roles, operation flows, and AP agreements before receiving formal approval. Success for a novel and groundbreaking ETF like this relies not just on a single mega-fund issuer, but on the entire digital asset ecosystem and reciprocal teamwork. Wall Street is fortunate to have Coinbase, which has already white labeled a significant portion of their crypto user database from 2013 and its KYCed wallet addresses.

Progress in Hong Kong

Following this, traditional brokerage firms with qualified crypto backgrounds were offered the chance to expand their business scope to virtual assets. This series of licensing provides a clear pathway and sets the stage for a likely spot Bitcoin ETF in 2024.

Bitcoin's Prospects in 2024

According to Coinbase Institutional, Bitcoin's position in 2024 should be strongly supported by factors like spot ETFs, the halving, and a decrease in real rates. These combined elements will lay the foundation for 2024 and are anticipated to push Bitcoin and the crypto industry's total market capitalization to unprecedented heights.

Edited by Jonathan Stoker