Bitcoin ETF Contenders Have Last-Minute Chance to Clear Final Hurdle
Today is the deadline for Bitcoin ETF contenders to make last-minute changes to their applications, specifically regarding authorized participant agreements. The authorized participant is responsible for creating and redeeming shares of an ETF, allowing investors to cash out.
The Securities and Exchange Commission (SEC) has been in discussions with asset fund managers for months, and this is the final step in the application process.
Key Details Emerging from Amendments
According to recent amendments filed by top contenders like BlackRock and ARK Invest, two important requirements have come to light. Firstly, Bitcoin ETFs may need to follow a cash model, creating new funds with cash rather than Bitcoin. Secondly, they must have authorized participant agreements in place.
If any applicant fails to include these provisions in their amendment today, they may be excluded from the Bitcoin ETF race.
Expectations for Authorized Participants
Bloomberg Senior ETF analyst Eric Balchunas expects some authorized participants to be named today or shortly before the launch of a Bitcoin ETF. However, ARK Invest and 21 Shares filed an amendment that mentioned authorized participant agreements but did not name the specific participant.
Predictions for Approval
Bloomberg Intelligence analysts predict a 90% chance of approval for a spot Bitcoin ETF by January 10. A spot Bitcoin ETF allows investors to gain exposure to Bitcoin’s price through shares tied to its value.
The Journey Towards Approval
Investment firms have been seeking SEC approval for a Bitcoin ETF since 2013 but have faced rejections due to concerns about market manipulation. However, major players like BlackRock have applied this year, leading analysts to believe that the SEC will soon give the green light for a regulated and safe way for traditional investors to access cryptocurrencies.
Hot Take: Bitcoin ETF Contenders Near the Finish Line
The deadline for Bitcoin ETF contenders to make final changes to their applications is today, with authorized participant agreements being the last hurdle to clear. This requirement ensures that an organization is in place to create and redeem shares of the ETF, allowing investors to cash out. Amendments filed by top contenders indicate that Bitcoin ETFs may need to follow a cash model and have authorized participant agreements. Failure to meet these requirements may lead to exclusion from the race. Analysts predict a spot Bitcoin ETF will gain approval in the new year, providing a regulated way for traditional investors to access cryptocurrencies.
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