Bitcoin ETF Frenzy: Wall Street's Final Push and SEC Submissions

The competition for launching a bitcoin ETF intensified on Friday, as major Wall Street firms finalized paperwork in anticipation of the U.S. Securities and Exchange Commission's probable and imminent approval. They trickled into the SEC throughout the day, with Invesco Galaxy, Bitwise, WisdomTree and Fidelity coming in after BlackRock, VanEck and Valkyrie.

BlackRock, Valkyrie, and Van Eck submitted amended S-1 forms to the SEC on the final day for the SEC to consider them in January 2024. These revisions updated their prior applications for Bitcoin exchange-traded funds (ETFs).

Van Eck's updated application outlines that "Authorized Participants" or "APs," financial firms authorized to create or redeem Shares with the Trust, will exclusively use cash for both creation and redemption transactions. This approach aligns with the SEC's inclination.

BlackRock, Fidelity, Invesco, Valkyrie, and Bitwise disclosed crucial details, such as partnerships with essential trading firms and prospective ETF fees, pending SEC approval. Observers anticipate potential SEC approval in early 2024, ending years of resistance to a spot bitcoin ETF.

Over a dozen firms aim to tap into this new market, offering easily investable products for investors preferring to keep their bitcoin exposure alongside traditional assets in brokerage accounts.

The rush in filings on Friday suggests a concerted effort to align with timing expectations. Analysts predict the SEC will greenlight multiple issuers simultaneously to prevent favoritism, motivating these eager issuers to prepare meticulously for potential approval.

BlackRock triggered the filing surge by naming JPMorgan and Jane Street as its authorized participants- a key role in the ETF business which ensures ETF prices stay closely linked to the value of their underlying assets. Other firms swiftly followed suit with their filings. Fidelity, WisdomTree, and Invesco Galaxy announced their authorized participants in the new filings. Invesco Galaxy selected Virtu and JPMorgan, while WisdomTree and Fidelity gave the honor to Jane Street Capital.

Amidst similar bitcoin ETF offerings, fee structures could be the deciding factor. Invesco and Galaxy Digital plan to waive fees for the first six months and $5 billion invested, according to Bloomberg ETF analyst Eric Balchunas. This undercuts Fidelity's proposed 39 basis points charge.

However, fund size also plays a pivotal role. Bitwise revealed a $200 million seed capital, surpassing BlackRock's $10 million, indicating potential investor preferences for larger and more popular funds at launch.

BlackRock, Van Eck, Grayscale, Bitwise, WisdomTree, Invesco, Galaxy, Fidelity, ARK Invest, Valkyrie, Franklin, Hashdex, Global X ETFs and Pando Asset have all submitted S-1 applications for spot Bitcoin ETFs.