Bitcoin ETF race fires up, here’s what’s going on

Journalist

Posted: December 30, 2023

• Large Wall Street institutions sent in their S-1 forms as 2023 drew to a close.
• Expectations of approval of ETFs grew, however, the price of BTC remained stagnant.

One of the biggest reasons being cited for BTC’s recent growth has been the anticipation around various Bitcoin [BTC] ETFs. As the year comes to an end, institutions inch closer to their ETF dream being realized.

It’s raining S-1’s

In a pivotal move, asset management powerhouses BlackRock, Valkyrie, and Van Eck have submitted amended S-1 forms to the U.S. Securities and Exchange Commission (SEC).

These amendments serve as crucial revisions to their initial proposals, all aimed at the creation of Bitcoin (BTC) exchange-traded funds (ETFs) bearing ticker symbols reflective of Bitcoin’s spot price, currently positioned at $42,544.09.

BlackRock’s updated filing identifies Jane Street and JPMorgan Securities as “authorized participants” in its proposed spot Bitcoin ETF application.

For context, Authorized Participants (APs) are entities approved to engage in the creation and redemption of shares in an ETF. They play a key role in maintaining the ETF’s liquidity and ensuring its market efficiency.

BlackRock has distinctly outlined its adoption of a cash-only model, making it the first user to settle a trade on JPMorgan’s Tokenized Collateral Network service on the 11th of October.

Having initially filed for a spot BTC ETF in June, BlackRock representatives engaged in two meetings with the SEC in December, underscoring the strategic importance of their pursuit.

Bitwise goes all in

Moreover, Bitwise also filed for an S-1. The recently submitted Bitwise S-1 indicates a significant commitment, with an apparent individual poised to inject $200 million into $BITB, surpassing BlackRock’s known contribution of $10 million.

This substantial financial backing is expected to provide substantial support in the initial stages of the competition. While the authorized participant (AP) remains undisclosed at this point, it is likely to be revealed shortly.

Bitwise S-1 has been filed and it looks like someone (I wonder who) is going to seed $BITB with $200m, which blows away BlackRock’s $10m (that we know of). That’s gonna be huge help in early days of race. No AP named but prob forthcoming. pic.twitter.com/hQ7uW9Occo

— Eric Balchunas (@EricBalchunas) December 29, 2023

After that, Fidelity also moved in. Fidelity’s recently submitted S-1 is noteworthy for explicitly detailing its fee structure, set at a remarkably low 0.39%, the most competitive rate observed thus far.

Additionally, the document identifies Jane Street as the authorized participant (AP). Fidelity’s comprehensive submission indicates its preparedness to actively participate in the evolving landscape.

Fidelity’s S-1 in as wow, it included its fee which will be 0.39%, by far lowest so far, also names Jane Street as AP. Fidelity is officially ready to party. pic.twitter.com/Taq32IGB0L

— Eric Balchunas (@EricBalchunas) December 29, 2023

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Bloomberg ETF analyst Eric Balchunas anticipated the SEC’s decision on outstanding spot Bitcoin ETF filings by the 10th of January 2024, with potential trading set to begin shortly thereafter.

Despite the surge in optimism, the price of BTC didn’t see much movement.