Fidelity Submits Updated Proposal for Spot Bitcoin ETF
Fidelity, a major financial institution, has submitted an updated proposal for its Wise Origin Bitcoin Trust to the U.S. Securities and Exchange Commission (SEC). The revised spot bitcoin exchange-traded fund (ETF) prospectus aims to address regulatory concerns and improve the chances of approval.
Joining Other Applicants in Addressing SEC Concerns
Fidelity is not alone in its efforts to meet the SEC’s requirements. Other potential issuers, including Invesco and Ark Invest, have also resubmitted their applications this month to address the regulator’s concerns.
Positive Signs for Approval
Bloomberg’s James Seyffart sees these actions as positive signs. He believes that the communication between potential spot Bitcoin ETF issuers and the SEC regarding required changes and amendments is a step in the right direction.
“More proof that potential spot Bitcoin ETF issuers are in communication with SEC regarding changes/amendments required for SEC to consider approving. Positive signs IMO.” – James Seyffart
Common Themes in Amended Applications
Finance lawyer Scott Johnsson highlights several recurring themes in the amended applications. These include specifying custodial arrangements, addressing hard forks, valuation/pricing sources and adherence to GAAP, risk disclosure around regulatory uncertainty, and acknowledging the energy-intensive nature of crypto mining.
“Recurring themes I’m seeing in the amendments so far: Specifying custodial arrangements in detail, mechanics around hard forks, valuation/pricing sources and adherence to GAAP, risk disclosure around regulatory uncertainty, mining is very energy intensive…” – Scott Johnsson
SEC’s Reluctance and Delays
The SEC has approved ETFs holding bitcoin futures in the past year but has been hesitant to approve a spot bitcoin ETF. Concerns over fraud, market manipulation, custody, and investor protection have been cited as reasons for the agency’s reluctance. The SEC accepted several applications for review earlier this year but has since postponed its decisions on proposals from Fidelity, Blackrock, Vaneck, Wisdomtree, Valkyrie, Bitwise, Invesco, and others.
Anticipation for First Quarter 2024
The industry expects the SEC to make a decision on one or more ETFs in the first quarter of next year. Recent events, such as the SEC missing the deadline to appeal a court ruling in favor of Grayscale’s spot bitcoin ETF, have given cause for optimism. The anticipation is evident in the market with bitcoin experiencing a surge this week due to fake news about Blackrock’s bitcoin ETF approval.
Hot Take: Fidelity’s Revised Prospectus Boosts Hope for Spot Bitcoin ETF Approval
Fidelity’s submission of an updated proposal for a spot bitcoin ETF to the SEC is a positive development that increases the chances of approval. By addressing regulatory concerns and joining other applicants in resubmitting their applications, Fidelity demonstrates its commitment to meeting the SEC’s requirements. The communication between potential issuers and the SEC regarding necessary changes and amendments is seen as a step forward. With recurring themes emerging in amended applications and growing anticipation for an SEC decision in early 2024, there is hope that the regulatory landscape will become more favorable for spot bitcoin ETFs.
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