SEC met multiple spot Bitcoin ETF applicants on Dec. 21

Several potential issuers met with the SEC to discuss their spot Bitcoin ETFs, adding to hopes that harmonized approvals may be on the horizon. 

The United States Securities and Exchange (SEC) held calls with spot Bitcoin ETF filers, including BlackRock, Valkyrie, ARK 21Shares, Franklin Templeton, Fidelity, VanEck, and Grayscale on Dec. 21 regarding their respective bids for investment vehicles that would hold crypto’s largest token.

According to documents on the Commission’s website, issuers reportedly spoke with staff from the SEC’s divisions of corporation finance, trading, and market. Fox Business initially reported the news and noted multiple conversations between companies and the SEC.

JUST IN: 🇺🇸 BlackRock had it's 6th official meeting with the SEC about its spot #Bitcoin ETF yesterday 👀 pic.twitter.com/j3MmrXm8vl

— Bitcoin Magazine (@BitcoinMagazine) December 22, 2023

Filings at press time had confirmed SEC meetings with seven of 13 potential Bitcoin ETF issuers. Bloomberg’s Eric Balchunas surmised that these talks were likely centered on redemption models, with the SEC set on cash creations rather than an in-kind structure. 

The SEC’s likelihood of leaning toward cash-create redemptions had previously been reported by crypto.news, although Wall Street titan BlackRock seemingly pushed for in-kind inclusions. Some firms like Hashdex and Valkyrie have since filed updated S-1 documents with cash-only amendments for their spot Bitcoin ETFs.

BlackRock lawyers straight living at the SEC lately. But not sure it matters anymore. Word is SEC is hard line on what they need re no wiggle room language around cash creations and an AP agreement. When we see S-1s w those updates can prob assume that issuer is home free. https://t.co/vx1w5q3QxH

— Eric Balchunas (@EricBalchunas) December 22, 2023

Despite dialogue between the SEC and these ETF operators, the securities watchdog has neither confirmed nor disclosed whether it plans to approve or deny applicants. However, experts predict a 90% chance of approval due to a deviation from the SEC’s modus operandi of delaying decisions and eventually issuing denials with minimal feedback to filers.

Grayscale’s court win over the SEC is another major factor fueling Bitcoin (BTC) ETF hype, although the SEC may still refuse the company, per expert opinion. 

The market impact of an SEC approval for any of the 13 spot Bitcoin ETF applications in review remains to be seen. MicroStrategy CEO and BTC proponent Michael Saylor stressed the significance of a decision, saying it could be the biggest development on Wall Street in the last 30 years.

Crypto trading firm QCP Capital and JPMorgan Chase hold divergent views, arguing that the hype may be overstated.