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SEC Prepares for Potential Approval of Spot Bitcoin ETFs in Early 2024

The SEC meets with firms to discuss the launch of spot bitcoin ETFs, signaling a potential approval in early 2024.
Published on 2023-12-22

SEC's Discussions with ETF Issuers

The U.S. Securities and Exchange Commission (SEC) recently held meetings with representatives from at least seven companies, including notable names such as BlackRock and Grayscale Investments. These discussions centered on launching exchange-traded funds (ETFs) tied to spot bitcoin, anticipated for early 2024.

Deadline for Final Changes

The SEC has set a deadline for final updates to ETF filings by December 29, 2023. Companies failing to meet this deadline risk exclusion from the initial wave of approvals. This deadline was initially reported by media outlets and highlights the urgency for issuers to finalize their proposals.

Anticipated Approvals

The SEC is expected to make decisions on these ETF proposals by January 10, with a likelihood of multiple approvals in the days leading up to this date. This potential approval marks a significant shift in the SEC's stance, as it had previously rejected several spot bitcoin ETF applications due to market manipulation concerns.

Changes to ETF Proposals

Recent updates to ETF filings include technical modifications, such as allowing cash redemptions, as requested by regulators. ARK and 21 Shares have disclosed their proposed fee structure, setting it at 0.80%. These changes aim to align proposals with regulatory expectations and facilitate approval.

Market Impact and Future Outlook

The approval of spot bitcoin ETFs could significantly impact the cryptocurrency market by providing investors with more straightforward access to bitcoin investments. Initial market liquidity is anticipated to be supported by "seed" capital from issuers, which will likely increase as trading commences.

This development follows a federal appeals court decision that critiqued the SEC's earlier rejection of a Grayscale proposal, potentially influencing the agency's current openness to spot bitcoin ETFs. The SEC's final decision will be closely watched by market participants and could set a precedent for future cryptocurrency-related financial products.

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