U.S. Regulators Signal Progress for Spot Bitcoin ETF Approval

Companies seeking to launch spot-Bitcoin exchange-traded funds achieved a significant breakthrough this week in their journey toward gaining approval from U.S. regulators in the upcoming days.

According to four confidential sources, Securities and Exchange Commission (SEC) staff advised various exchanges and issuers pursuing ETF listings to submit a final version of a crucial document by Friday. These individuals, who requested anonymity due to the private nature of the discussions, mentioned that the staff provided no additional feedback on the paperwork for several firms following the latest revisions.

The submissions, termed 19b-4 filings, propose rule changes on stock exchanges necessary for ETF trading. On January 5, amendments were filed for spot BTC ETF applications from asset managers BlackRock, Valkyrie, Grayscale, Bitwise, Hashdex, ARK 21Shares, Invesco Galaxy, Fidelity, Franklin Templeton, VanEck and WisdomTree. 

An insider familiar with the process indicated that SEC commissioners are anticipated to vote on the exchange-rule filings next week, as reported by Bloomberg. ETF approvals can often be handled by SEC staff without requiring a vote by commissioners. It remains uncertain if SEC staff had no further feedback for all the firms’ 19b-4 filings.

In addition to the 19b-4 filings, issuers also await SEC approval for the final versions of their S-1 filings, the prospectus documents for the ETFs. The U.S. reguators set a deadline for issuers to file updated S-1s by 8 a.m. Washington time on Monday. The approvals of 19b-4 and S-1 forms might occur concurrently or separately, though typically, S-1s are greenlit after 19b-4s.

Should both approvals materialize, the ETFs could commence trading as early as the subsequent business day.

Last week, several issuers, including BlackRock Inc. and Fidelity, submitted amended S-1 filings to disclose their authorized participants—broker-dealers responsible for managing the creation and redemption of ETF share baskets. While this step is routine in traditional ETF setups, its inclusion in Bitcoin ETF applications drew attention due to concerns among some industry observers about the potential difficulty Bitcoin funds might face in attracting broker-dealers.