Checking the latest progress of 13 spot Bitcoin ETF proposals

Keeping Up with the Latest Progress on 13 Proposed Bitcoin ETFs

Industry professionals are full of confidence, eagerly awaiting the Securities and Exchange Commission (SEC) to make a approval decision on the spot Bitcoin ETF next month. Cory Klippsten, CEO of Swan Bitcoin, predicted in an interview with Bloomberg that the approval window may have narrowed down to January 8th, 9th, or 10th, 2024.

A list compiled by Bloomberg Intelligence analyst James Seyffart shows that there are currently 13 proposed spot Bitcoin ETFs submitted to the SEC.

This article will summarize the latest developments regarding these 13 proposals for spot Bitcoin ETFs.

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Grayscale

According to industry observers, Grayscale Investments defeated the SEC in court in August, which has made people more optimistic about the approval of spot Bitcoin ETFs.

At that time, the judge ruled that the regulatory agency’s refusal to convert the Grayscale Bitcoin Trust (GBTC) into an ETF but allowing ETFs based on Bitcoin futures was “arbitrary and capricious.” The SEC chose not to question this ruling.

Grayscale stated that GBTC is ready to operate as an ETF once approved by regulatory authorities and emphasized that it will “cooperate promptly with the SEC.”

In a blog post on December 1st, Grayscale noted that although the timeline for approving spot Bitcoin ETFs is “essentially uncertain,” the company believes it is “only a matter of time, not if.”

Chief Legal Officer Craig Salm stated in the post that if Grayscale receives approval from the SEC, the company plans to immediately move GBTC from the OTCQX market to NYSE Arca.

The company stated that the simultaneous issuance and redemption during the conversion to an ETF will essentially eliminate any discounts or premiums historically held by the trust and allow it to closely track the value of BTC.

Ark Invest/21Shares

People following the race for Bitcoin ETFs should be familiar with their names. Ark Invest and 21Shares collaborated for the first time in 2021 to propose a spot Bitcoin fund.

The application was rejected in March 2022, then again in February 2023, and the latest reapplication was in April, ahead of asset management giant BlackRock and other companies.

It is expected that the SEC will make a ruling on the latest submission on January 10th. Some industry observers believe that on that day, the regulatory agency will also decide the fate of similar proposals from other issuers.

Ark CEO Cathie Wood stated, “We do think, while we’re first in line, that there will be many companies that are simultaneously approved, and it’s going to depend upon the specifics of how they submitted their applications, but we could see north of six approvals at one time.”

The two parties updated the Bitcoin ETF application for the third time on November 20th, stating that the sponsor fee is 0.80% of the Bitcoin held by the trust. The fund’s shares will trade on the Cboe BZK exchange with the ticker symbol ARKB.

BlackRock

BlackRock is a financial giant that manages around $9 trillion in assets. The company joined the spot Bitcoin ETF race in June, prompting many other companies to increase their bids for such products.

The proposed iShares Bitcoin Trust by BlackRock will use the ticker symbol IBTC and trade on Nasdaq.

Last month, the company had multiple meetings with officials from the US Securities and Exchange Commission’s Division of Trading and Markets. The announcement of its November 20 meeting outlined the differences between the physical and cash redemption models.

Authorized participants of different ETFs use two primary methods to participate in the creation and redemption of shares: in-kind or cash trading.

Through in-kind trading, APs exchange ETF shares for a corresponding basket of securities that reflect the ETF’s holdings. For cash trading, APs create or redeem shares in exchange for cash instead of securities.

A document dated November 28 (the same day as another meeting) stated, “the SEC has some unresolved concerns with the physical model.”

In the latest proposal amendment submitted by BlackRock on Monday, the trust fund will only accept in-kind creations and redemption requests from authorized participants and market makers with implemented compliance plans.

The updated filing also added information about the company raising $100,000 in seed funding for the fund.

Bitwise

Bitwise’s latest S-1 amendment was released on the same day as BlackRock’s. The Bitwise Bitcoin ETF (previously named Bitwise Bitcoin ETP Trust) will trade on NYSE Arca with the ticker symbol BITB.

Bloomberg analysts said, “The SEC and these issuers have been working through issues, and these filings are likely the result of multiple conversations and significant hours of work.”

Bitwise Chief Investment Officer Matt Hougan noted that the dialogue between the issuers and the SEC is one reason why “this does feel different than a few months ago.”

Like other companies, Bitwise has been hoping to launch a spot Bitcoin ETF for years.

The company submitted a more than 100-page white paper in October 2021, which indicated that the CME Bitcoin futures market is ahead of the spot market and unregulated Bitcoin futures market. Additional research published indicates that the new Bitcoin ETP is unlikely to have a significant impact on the price of the CME Bitcoin futures market.

Bitwise addressed eight points of disagreement raised by the SEC in its September filing.

VanEck

VanEck updated the S-1 form for the VanEck Bitcoin Trust on Friday, marking its fifth revision. The disclosure states that the fund’s ticker symbol will be HODL.

HODL will be traded on Cboe. The latest disclosed information does not reveal the fees for the proposed product.

VanEck has hired Gemini Trust Company as the Bitcoin custodian for their ETF, which is different from most companies that choose Coinbase as their custodial partner.

Matthew Sigel, the director of digital asset research at VanEck, stated in June that the SEC should immediately approve all spot Bitcoin ETFs.

Sigel and VanEck investment analyst Fredrik Bush wrote on Thursday that they expect such products to be approved in the first quarter. They estimate that the funds flowing into spot Bitcoin ETFs in the first few days will be around $1 billion and will reach $2.4 billion in the first quarter.

WisdomTree

Following BlackRock’s application, WisdomTree refiled their application for a spot Bitcoin ETF in June.

The company manages approximately $98 billion in assets and stated in their disclosure, “The Bitcoin market has matured, and its operating efficiency and scale are similar in substance to mature global equity, fixed income, and commodity markets.” WisdomTree amended their Bitcoin ETF application on November 16. The fund’s shares will be traded on the Cboe BZX exchange under the ticker symbol BTCW.

Will Peck, the head of digital assets at WisdomTree, said during the company’s October earnings call, “There does seem to be some exciting momentum [and] we remain very focused on the spot Bitcoin ETF.” “We believe it’s the best execution vehicle for this asset class in the U.S. traditional channels, and we look forward to continuing to work with regulators on it.”

Invesco

Invesco followed in BlackRock’s footsteps and refiled their application for a spot Bitcoin ETF in June. The proposed ETF will be listed on the Cboe BZX exchange. The application was submitted in partnership with Galaxy Digital and reflects both of their Bitcoin ETF applications for 2021.

The company made modifications to their application earlier this fall, indicating that they will continue to engage with regulatory authorities as they consider the decision.

According to the trustee and clearing company’s list, the ticker symbol will be BTCO.

Fidelity

Fidelity has joined the current race for a Bitcoin ETF as a refiler, similar to Invesco and Ark. One of the standout reasons for the proposed Bitcoin ETF is its custodian, Fidelity Digital Assets Services. Unlike some competitors, it does not use Coinbase.

Fidelity Digital Assets has been providing custody and trade execution services since 2018, making it the natural choice for the company’s in-house custody.

The proposal was first submitted in late June, which means it is also following closely behind BlackRock. Fidelity previously applied for a spot Bitcoin ETF as early as 2021, but it was blocked by the SEC in January of last year.

According to the DTCC’s list, the fund will trade under the code FBTC. Like Jingshun, it will be listed on the Chicago Options Exchange.

Valkyrie

Valkyrie followed closely behind BlackRock and applied for a spot Bitcoin ETF at the end of June (a few days before Fidelity).

The company has also made multiple modifications to its proposal. Unlike some other applicants, Valkyrie seems to be interested in the ticker symbol BRRR for its proposed ETF – a reference to a “money printing machine.”

The ETF will be listed on Nasdaq alongside BlackRock’s proposed ETF. These two funds are the only ones listed on Nasdaq. Not surprisingly, Coinbase is listed as the proposed custodian of the fund.

The last time the SEC deferred Valkyrie’s application was at the end of September, with the next deadline being after the golden window proposed by Seyffart.

Valkyrie’s Chief Investment Officer, Steven McClurg, said in an interview with Schwab Network that he believes the price of Bitcoin could reach as high as $100,000 next year (whether it halves or a potential spot Bitcoin ETF is launched).

Global X

Another “returner,” Global X applied for a spot Bitcoin ETF in early 2021 and then applied for another spot Bitcoin ETF in August.

Like other companies, it plans to list on the Cboe exchange and have Coinbase as the custodian. The initial application submitted to the SEC listed Coinbase as a monitoring sharing partner, which was seen as an attempt to appease regulatory authorities.

The application has been delayed since November, which is not surprising as the SEC said it needed more time to consider the application.

Prior to the delay, Bloomberg analyst Eric Balchunas posted on X, stating that the SEC had discussions with potential spot Bitcoin ETF issuers about adding cash creation to the proposed ETF 19b-4 application, which the analyst said was a “good sign.”

Hashdex

In late August, Hashdex applied to hold spot Bitcoin in its Bitcoin futures ETF. The application was updated to Hashdex Bitcoin ETF to “reflect the fund’s updated investment strategy.”

It is one of the few companies that does not rely on Coinbase as a monitoring sharing partner. Instead, it chooses to use the physical market exchange of the CME to “acquire and settle” Bitcoin. It will also hold spot Bitcoin, Bitcoin futures contracts, as well as cash and cash equivalents. If the fund is converted, it will be listed on the New York Stock Exchange alongside Grayscale.

The updated fund will trade under its futures code DEFI.

Franklin Templeton

Financial services giant Franklin Templeton also joined the spot Bitcoin ETF race in September. It is seeking to list its fund on the Cboe BZX exchange. Like most other applicants, the company chose Coinbase as its custodian.

The comment period for the proposed Bitcoin ETF is set to begin at the end of November, leading some to believe that the SEC’s early solicitation of comments increases the chances of the Bitcoin ETF being approved in early January.

Franklin Dampington wrote in his initial proposal that the ETF would be part of a “series” within the Franklin Dampington Digital Holdings Trust.

LianGuaindo Asset Management

As the latest participant in the race for a physically-backed Bitcoin ETF, LianGuaindo submitted their proposal on November 29th. If approved by the SEC, the ETF will be listed on Cboe – one of the 8 exchanges selected among the 13 applying firms.

The Swiss asset management company formally entered the competition for an ETF earlier this week by submitting Form 19b-4.

While LianGuaindo has various cryptocurrency products trading on the six major Swiss exchanges, this would be their first foray into issuing a crypto ETF in the United States.

Coinbase will serve as the custodian for the fund, while LianGuaindo has appointed BNY Mellon in New York as the trust administrator. Due to the later application, it is still unclear whether LianGuaindo will be able to launch the ETF simultaneously with BlackRock or Ark if approved.

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