In a significant twist in the bitcoin ETF saga, the US Securities and Exchange Commission (SEC) is apparently stepping up its communication with applicants, a development that stands out in the long history of the ETF application process. of bitcoin. This move comes on the heels of fake news about the approval of BlackRock’s bitcoin ETF, adding to the momentum surrounding potential SEC acceptance.
Historically quiet on spot bitcoin ETFs, the SEC’s proactive outreach has been recognized by some of the investment world’s biggest players. Ark Invest, in collaboration with 21 Shares, became the pioneer applicant to revise its filing in direct response to the SEC’s comments in recent days, as Bitcoinist reported.
Following suit, other key players, including Fidelity, have made similar adjustments. Eric Balchunas, leading ETF analyst at Bloomberg, commented via X, “Fidelity has now submitted an amended application. Three less emitters, six to go.”
bitcoin Spot ETF Momentum Recovers
Digging deeper into the substance, Fidelity’s renewed filing clarifies several key components of its bitcoin spot ETF. These include the complexities of escrow arrangements, procedures related to hard forks, how they determine valuation and price while respecting Generally Accepted Accounting Principles (GAAP), comprehensive disclosure of risks related to regulatory uncertainties, implications of the energy consumption of bitcoin mining and potential risks related to illicit transactions.
Scott Johnsson of Davis Polk weighed in on the trends that observed of the amendments: “The amendments so far have been detailed by specifying escrow arrangements, explaining the mechanisms related to hard forks, clarifying valuation and pricing sources and their compliance with GAAP, and discussing the factors of risk associated with regulatory uncertainties, intensive energy use. nature of mining and implications of illicit transactions”.
Additionally, he speculated on the trajectory of these developments and predicted that it will be “very interesting” to see the next round of amendments, as it should be “more apparent what the SEC is really focused on rather than simply issuers improving their disclosures given that approval.” It seems more plausible now.”
James Seyffart, another Bloomberg expert, answered to Johnson’s ideas with his observation: “These amended applications are further evidence that potential bitcoin ETF spot issuers are actively communicating with the SEC about the changes and amendments necessary for potential SEC approval. It’s a positive sign, in my opinion. However, we can expect more amendments in the coming weeks and months. This appears to be a dynamic dialogue with feedback loops and responses. “I look forward to the SEC’s subsequent requests on these documents.”
Shedding more light on the matter, in a podcast In the session with Scott Melker, both Seyffart and Eric Balchunas delved into the implications of these developments. Balchunas articulated: “There will be multiple at once. (…) If it is January 10, I bet we will find out about the approval in 2023.”
Momentum suggests everything is lining up for a January launch. If the SEC doesn’t give the green light to the Ark ETF by this date, it will have to provide an entirely new justification. But given its recent commitments to issuers, this doesn’t seem plausible.
“And then we think they will do the same as with Ether (futures ETF), accelerate the rest, move them to the Ark state and then let them out in two rounds or on the same day, whoever is ready or not,” Balchunas explained.
Given these developments, bitcoin and the investment community are on the edge of their seats as they anxiously await the SEC’s next move on the bitcoin ETF front. The recent proactive stance of the regulatory body has certainly given new rays of hope to those anticipating a favorable verdict.
At press time, btc was trading at $28,683, after facing resistance at the $29,000 mark during Asian trading hours.
Featured image from Medium, chart from TradingView.com
