The deadline for spot Bitcoin exchange-traded fund (ETF) applicants in the United States to file final S-1 amendments is today, December 29. This deadline is significant as it will determine which applicants could potentially be approved for the first wave of spot Bitcoin ETFs in early January. The U.S. Securities and Exchange Commission (SEC) has required applicants to sign an agreement with an authorized participant (AP) and establish a cash-create redemption model.
According to Bloomberg’s senior ETF analyst, Eric Balchunas, many ETF applicants have updated their filings to include the cash-create redemption model. As of December 22, seven applicants have chosen the cash-create model, while the other seven have included both cash-create and in-kind models in their registration statements. Balchunas explains that most existing ETFs use the in-kind creation model, where intermediaries provide actual assets like Bitcoin to create new ETF shares.
The SEC’s preference for the cash-create model is driven by their desire to minimize the number of intermediaries that have access to the actual Bitcoin during the redemption and offering process. Balchunas suggests that the SEC wants a more closed system with fewer intermediaries touching the actual Bitcoin, as they are concerned about money laundering and want more control over the Bitcoin involved.
In addition to the cash-create preference, ETF applicants must have a determined authorized participant by today. Balchunas mentions that two trading giants, Jane Street and Virtu Financial, are likely to be the authorized participants for most applicants.
It is worth noting that in their most recent amendment, ARK and 21Shares did not specify the name of an authorized participant, but it is expected to be revealed in the final update prior to the launch of their ETFs.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | North America |
| Countries | 🇺🇸 |
| Sentiment | neutral |
| Relevance Score | 1 |
| People | Eric Balchunas |
| Companies | BlackRock, ARK, Virtu Financial, Jane Street, Coinbase, 21Shares |
| Currencies | Bitcoin |
| Securities | None |
