Bitcoin ETF Looks Very Likely Given These Bureaucratic SEC Steps

Let’s
address
the
topic
the
crypto
industry
is
obsessed
with:
I
believe
there
is
a
98%
chance
that
a
spot
bitcoin
ETF
will
be
approved
in
the
U.S.
by
Jan.
10.

Recent
developments
support
that.
The
Securities
and
Exchange
Commission
has
been
meeting
with
potential
issuers
of
these
ETFs,
even
during
the
busy
holiday
season,
to
straighten
up
the
final
details,
structure
the
creation
and
redemption
procedure
and
guide
issuers
to
incorporate
the
latest
changes
into
their
revised
S-1
filings.
BlackRock
just
filed
its
fourth
amendment
to
its
application
with
the
SEC
on
Dec.
23
and
is
expecting
to
seed
its
bitcoin
ETF
with
$10
million
on
Jan.
3.

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Of
course,
seeding
the
ETF
shell
does
not
necessarily
mean
launch.

But
Fox
Business
reported
that
final
amendments
to
all
spot
bitcoin
ETF
applications
must
be
done
by
Dec.
29:
“The
applications
that
are
fully
furnished
and
filed
by
Friday
will
be
considered
in
the
first
wave.”

The
following
indicates
the
SEC
timetable
of
13
prospective
issuers:

Source:
Bloomberg

The
SEC
has
requested
that
issuers
have
their
authorized
participant
agreement
–
describing
who
will
play
the
key
role
of
creating
and
redeeming
ETF
shares
–
available
in
the
coming
days.
Authorized
participants
are
a
central
part
of
the
ETF
business,
but
this
job
will
be
a
particularly
tough
one,
with
bitcoin
ETF
APs
needing
basic
knowledge
of
digital
assets
and
the
ability
to
provide
safekeeping
and
custody,
conduct
due
diligence
for
anti-money-laundering
and
know-your-customer
purposes,
ensure
compliance
with
sanctions
regulations,
deal
and
place
crypto
asset
orders
on
behalf
of
clients,
and
so
on.
Not
many
traditional
brokerages
are
well-equipped
to
do
this.

No
authorized
participants
yet.
Source:
Bloomberg

It
is
obvious
that
the
SEC
wanted
the
ETF
issuers
to
have
at
least
conducted
the
preliminary
chat
with
the
market
participants
and
sort
things
out
–
e.g.
the
assigned
roles,
operation
flows,
AP
agreements
–
before
formally
granting
the
green
light.
For
a
brand
new
and
groundbreaking
ETF
like
this,
it
takes
more
than
one
mega-fund
issuer
to
succeed;
it
is
about
the
whole
digital
asset
ecosystem
and
reciprocal
teamwork.
Wall
Street
is
lucky
to
have
Coinbase,
which
already
white
labeled
a
significant
portion
of
their
crypto
user
database
from
2013
and
its
KYCed
wallet
addresses.

Meanwhile,
in
Hong
Kong,
the
Securities
&
Futures
Commission
on
the
other
hand
is
progressing
with
spot
bitcoin
ETFs
in
a
more
logical
and
conventional
order.
First,
the
SFC
issued
virtual
asset
management
licenses,
allowing
fund
managers
with
crypto
experience
to
launch
long-only
private
funds
for
high-net-worth
individuals
and
institutions.
Second,
they
issued
a
virtual
asset
exchange
license
on
crypto
trading
platforms,
letting
retail
clients
to
buy
or
sell
bitcoin
and
ether.

Then,
they
offered
traditional
brokerage
firms
with
qualified
crypto
backgrounds
to
upgrade
the
business
scope
to
virtual
assets
as
well,
meaning
those
brokers
can
also
provide
crypto-related
dealing
and
placing
orders
on
behalf
of
their
clients.
This
proper
sequence
of
licensing
provides
the
ground
rules
and
makes
a
spot
bitcoin
ETF
likely
in
2024.

Bitcoin’s
strength
in
2024
should
be
well
supported
by
themes
like
spot
ETFs,
the
halving
and
a
fall
in
real
rates,
according
to
Coinbase
Institutional.
The
three
combined
factors
will
establish
the
basic
fundamentals
of
2024
and
will
push
bitcoin
and
the
crypto
industry’s
entire
market
capitalization
to
all-time
highs.