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SEC to Deliberate on Application for Bitcoin ETF

The Securities and Exchange Commission (SEC) in the United States and Fidelity convened to review Fidelity’s Wise Origin Bitcoin Trust application, analyzing diagrams and the operational aspects of the product.

According to a filing released on December 7th, a meeting occurred involving two representatives from Cboe BZX Exchange, six individuals from the SEC, and nine from Fidelity to discuss the operations of the Wise Origin Bitcoin Trust.

“The discussion concerned Cboe BZX’s proposed rule change to list and trade shares of the Wise Origin Bitcoin Trust under Cboe BZX Rule 14.11(e)(4). Fidelity also provided the attached presentation.”

The filing included PowerPoint presentations used in the meeting to illustrate the functional structure of the Bitcoin ETF.

ETF AP Agency Model

“Arbitrage and hedge are more efficient with physical creations,” the filing stated while proposing the most effective strategy to the U.S. regulator:

“Allowing for physical creation and redemption is critical to enhance trading efficiency and secondary market pricing for all participants.”

Fidelity filed an application for a spot Bitcoin ETF with the SEC on June 19, following similar filings by BlackRock and other asset managers. However, the SEC had previously rejected Fidelity’s spot Bitcoin ETF application in 2022.

This follows recent reports indicating that the SEC is holding meetings with applicants for spot Bitcoin ETFs to address various aspects of their applications.

There has been extensive speculation about the timing of the approval for a spot Bitcoin ETF lately.

Among the 13 asset managers applying, Hashdex anticipates the arrival of the initial U.S. spot Bitcoin ETF by the second quarter of 2024.

We did an article on that here.

“The exact timing of a spot Bitcoin ETF in the U.S. remains unclear, but in 2023, the narrative around this product switched from a question of ‘if’ to a matter of ‘when,'” stated Hashdex’s U.S. and Europe head of product Dramane Meite.

At the same time, Bloomberg’s ETF analysts Eric Balchunas and James Seyffart maintain their confidence that January 10 will signify the collective approval of all spot Bitcoin ETFs. This coincides with the SEC’s deadline to either approve or reject ARK Invest’s application.

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