SEC Scrambles to Respond to New Bitcoin ETF Filings: Insider Scoop

• SEC Officials Provide Comments on Bitcoin ETF Applications
• Minor Details Addressed in SEC's Commentary
• Unprecedented SEC Response Time
• Dialogue Continues Between SEC and ETF Issuers
• ETF Approval Process and Community Expectations

SEC Officials Provide Comments on Bitcoin ETF Applications

In a recent turn of events, prospective issuers of bitcoin exchange-traded funds (ETFs) received commentary from U.S. Securities and Exchange Commission (SEC) officials. This development occurred only a few hours after these companies had submitted documents outlining charges for their prospective products, according to a source familiar with the situation.

Minor Details Addressed in SEC's Commentary

According to the same source, the issuers are expected to file revised documents on the coming Tuesday. The SEC's comments mainly addressed minor details present in the adjusted S-1 forms rather than any significant changes, which should not affect the timeline for a potential approval by the regulator.

Several issuers, including BlackRock, Grayscale, and Fidelity, who aim to introduce spot bitcoin ETFs in the U.S., announced their expected charges in applications earlier on Monday.

Unprecedented SEC Response Time

James Seyffart, an analyst with Bloomberg Intelligence who has been meticulously following the bitcoin ETF applications, expressed on Twitter that it was quasi-unprecedented for applicants to receive feedback from the SEC on the same day as their amended filings.

Dialogue Continues Between SEC and ETF Issuers

Monday's comments from the SEC affirm that the Agency continues its dialogue with potential ETF issuers, most of whom proposed the creation of spot bitcoin ETFs last summer. The SEC is facing a deadline of January 10, 2024, for one of the applications submitted by Ark and 21 Shares.

Recent weeks have seen a rush of revised filings from issuers reflecting their discussions with SEC officials, fostering hope that the agency will authorize spot bitcoin ETFs to trade in the U.S. This optimism was further boosted when exchanges such as Nasdaq, NYSE Arca, and Cboe BZX submitted revised 19b-4 documents on the previous Friday, prepared to align with the S-1 filings, according to another source.

ETF Approval Process and Community Expectations

Before an ETF can commence trading, both 19b-4 and S-1 applications must be deemed effective by the SEC. Advocates of bitcoin ETFs believe that a regulated financial product will allow traditional financial institutions and retail investors to gain exposure to the world's first cryptocurrency's price, without the need to establish wallets or deal with new financial structures.

Despite previous rejections of all applications for a spot bitcoin ETF, dating back to 2013, recent feedback and the rate of response suggest that the current batch of applications could soon be green-lighted by the SEC.

Edited by Jonathan Stoker