As of the time of writing, the U.S. Securities and Exchange Commission (SEC) has extended the decision-making process on seven Bitcoin ETF filings. These filings include BlackRock's iShares Bitcoin Trust, Fidelity's Wise Origin Bitcoin Trust, VanEck Bitcoin Trust, WisdomTree Bitcoin Trust, Invesco Galaxy Bitcoin ETF, Valkyrie Bitcoin Fund, and Bitwise Bitcoin ETP Trust. According to the documents, the regulatory agency will make decisions on various proposed rule changes by October. The new deadlines for iShares, Wise Origin, Invesco Galaxy, VanEck, and WisdomTree are October 17th, Valkyrie is October 19th, and Bitwise is October 16th. By that time, the SEC can approve, reject, or further delay their decisions.
What is a Bitcoin ETF?
ETF stands for Exchange Traded Fund, a hybrid of stocks and mutual funds that offers a basket of assets such as stocks, bonds, or commodities, traded on major stock exchanges. Investors can buy and sell them much like regular stocks.
A Bitcoin ETF is a combination of an ETF and Bitcoin, essentially tracking the underlying Bitcoin assets. A Bitcoin ETF enables traditional investors to invest in BTC in a familiar investment vehicle. Based on the underlying assets, Bitcoin ETFs can be divided into Bitcoin futures ETFs and Bitcoin spot ETFs.
Bitcoin futures ETFs track Bitcoin futures, while Bitcoin spot ETFs track the actual Bitcoin, requiring physical Bitcoin backing per ETF share. Compared to holding BTC directly, Bitcoin spot ETF investors are spared the complexities of storage and security measures. This means that investors can easily access Bitcoin assets en masse, without directly holding BTC, as ETF issuers and custodians hold it on their behalf. The approval of a Bitcoin spot ETF is widely regarded as a significant positive for the industry as it bridges traditional finance and the cryptocurrency sector.
Current Status of Bitcoin Spot ETF Applications in 2023
In June 2023, asset management giant BlackRock submitted an application for the iShares Bitcoin Trust, initiating a new round of competition for Bitcoin spot ETF approvals. Following BlackRock's lead, several investment and asset management institutions joined the competition. As of August 2023, including BlackRock, a total of eight institutions have submitted applications for Bitcoin spot ETFs to the SEC.
The SEC's resolution period for Bitcoin spot ETF applications spans 240 days, involving three rounds of public responses. The intervals for response dates are 45 days, 45 days, 90 days, and 60 days. This means that the SEC has three opportunities to postpone the decision on the ETF applications before issuing the final decision (approval or rejection). Additionally, the SEC reserves the right to approve or reject the applications at any point during the decision-making process.
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