The U.S. Securities and Exchange Commission (SEC) has set a critical deadline for those aiming to launch spot Bitcoin exchange-traded funds (ETFs) in the early part of 2024. According to a recent Reuters report, the SEC has informed applicants that they must submit their final amendments by Dec. 29.
This directive emerged from a Dec. 21 meeting where SEC officials convened with representatives from several firms aspiring to introduce spot Bitcoin ETFs. Among the attendees were delegates from prominent entities such as BlackRock, Grayscale Investments, ARK Invest, and 21 Shares.
The discussions also involved representatives from potential listing exchanges like Nasdaq and the Chicago Board Options Exchange, alongside legal advisors and issuers. The SEC made it clear that those failing to meet the Dec. 29 deadline would miss out on the initial round of potential approvals slated for early January.
The deadline was first brought to light by Fox Business reporter Eleanor Terrett, who shared the information on the platform X (formerly known as Twitter). Terrett emphasized that only those applications completed and filed by Dec. 29 would be considered for the first batch of approvals. She also noted that the SEC would reject applications involving in-kind creation mechanisms, favoring a cash redemption model instead.
The shift from in-kind redemptions (non-monetary exchanges like Bitcoin) to a cash-only model has been a significant focus for many spot Bitcoin ETF applicants. Moreover, the SEC has requested these filers to explicitly mention their authorized participants (AP) in their applications.
Eric Balchunas, a Bloomberg ETF analyst, highlighted the complexity of complying with the AP agreement requirement. He suggested that this could be a challenging final step for many applicants, with the combination of the AP agreement and a cash-only model being pivotal for approval. As of Dec. 22, no applicant had finalized the AP agreement, although seven firms had already transitioned their redemption models to cash, as per Balchunas.
Despite these stringent requirements and the tight timeline, Bloomberg analysts remain optimistic about the SEC approving the first wave of spot Bitcoin ETFs by Jan. 10, marking a significant development in the cryptocurrency investment landscape.