One month left?! A review of the latest progress of 13 spot Bitcoin ETF proposals

Industry insiders are confidently waiting for the U.S. Securities and Exchange Commission ( SEC ) to make an approval decision on spot Bitcoin ETFs next month. In an interview with Bloomberg, Swan Bitcoin CEO Cory Klippsten predicted that the approval window may have narrowed to January 8, 9 or 10, 2024.

There are currently 13 proposed spot bitcoin ETFs filed with the SEC, according to a list compiled by Bloomberg Intelligence analyst James Seyffart .

This article will summarize the latest progress of these 13 spot Bitcoin ETF proposals.

Grayscale

Grayscale Investments’ August court victory over the U.S. Securities and Exchange Commission (SEC) has fueled optimism about the approval of a spot bitcoin ETF, according to industry watchers.

The SEC chose not to challenge the ruling when a judge ruled that the regulator’s refusal to convert the Grayscale Bitcoin Trust (GBTC) into an ETF but allowing the launch of an ETF based on Bitcoin futures was “arbitrary and capricious.”

Grayscale said GBTC is ready to operate as an ETF following regulatory approval, noting that it will “work quickly with the SEC.”

Grayscale noted in a Dec. 1 blog post that while the timeline for spot Bitcoin ETF approval is “inherently uncertain,” the firm believes it is “a matter of when, not if.”

Chief Legal Officer Craig Salm said in the post that if Grayscale receives SEC approval, the company plans to immediately move GBTC from the OTCQX Markets to NYSE Arca .

The company said that as a result of the conversion to an ETF, the simultaneous issuances and redemptions will essentially eliminate any discount or premium the stock has historically held and enable the trust to more closely track the value of BTC.

Ark Invest/ 21Shares

People who follow the Bitcoin ETF competition should be familiar with their names. Ark Invest and 21Shares first collaborated in 2021 to propose a spot Bitcoin fund proposal.

The application was rejected in March 2022, then a second time in February 2023, and its latest reapplication was in April, ahead of asset management giant BlackRock and other companies.

The SEC is expected to rule on the latest filing on Jan. 10, a date some industry observers believe will also be when the regulator decides the fate of similar proposals from other issuers.

“We do think that while we are first in line, a number of companies will be approved at the same time and depending on how exactly they submit their applications, there could be more than half a dozen applications approved at once,” said Ark CEO Cathie Wood.

The parties updated the Bitcoin ETF application for the third time on November 20, stating that the sponsorship fee would be 0.80% of the Bitcoin held by the trust. The fund’s shares will trade on the Cboe BZK exchange under the ticker ARKB.

BlackRock

BlackRock, a financial giant with about $9 trillion in assets under management, joined the spot bitcoin ETF race in June, prompting many other firms to re-raise their bids for such products.

BlackRock’s proposed iShares Bitcoin Trust would use the IBTC ticker and trade on Nasdaq.

The company met with officials from the SEC’s Division of Trading and Markets several times last month. Its Nov. 20 announcement of the meeting outlined the differences between the in-kind and cash redemption models.

Authorized participants of different ETFs participate in the creation and redemption of shares using two main methods: physical or cash transactions.

With physical transactions, the AP exchanges ETF shares for a corresponding basket of securities that reflects the ETF's holdings. For cash transactions, the AP creates or redeems shares in exchange for cash rather than securities.

A filing dated Nov. 28, the day of another meeting, noted that “the SEC has certain unresolved questions regarding the physical mock-up.”

BlackRock’s latest proposed amendment, filed on Monday, states that the trust will only accept physical creation and redemption requests from authorized participants and market makers that have implemented compliance programs.

The updated filing also included information that the company had raised $100,000 in seed funding for the fund.

Bitwise

Bitwise’s latest S-1 amendment was released on the same day as BlackRock’s. The Bitwise Bitcoin ETF (previously proposed to be named the Bitwise Bitcoin ETP Trust) will trade on NYSE Arca under the ticker BITB.

"Both the SEC and these issuers are working to resolve the issues, and these filings are likely the result of many conversations and many man-hours between the two parties," Bloomberg analysts said.

Matt Hougan , chief investment officer at Bitwise, pointed to the conversations between issuers and the SEC as one reason why “this time does feel different than it did a few months ago.”

Like other companies, Bitwise has been looking to launch a spot Bitcoin ETF for years.

The company submitted a more than 100-page white paper in October 2021. It showed that the CME Bitcoin futures market is ahead of the spot market and the unregulated Bitcoin futures market. It published additional research that showed that the new Bitcoin ETP is unlikely to have a major impact on the CME Bitcoin futures market price.

In its September filing, Bitwise addressed eight disagreements raised by the SEC with research included in the company's previous application.

VanEck

VanEck updated its Form S-1 for the VanEck Bitcoin Trust on Friday, marking its fifth amendment. The disclosure noted that the fund’s ticker symbol is HODL.

HODL will trade on Cboe. The latest disclosure did not disclose the fees for the proposed product.

VanEck hired Gemini Trust Company as the ETF’s Bitcoin custodian — a departure from most firms that chose Coinbase as their custody partner.

Matthew Sigel, head of digital asset research at VanEck, said in June that the SEC should immediately approve all spot bitcoin ETFs.

Sigel and VanEck investment analyst Patrick Bush wrote Thursday that they expect such products to be approved in the first quarter. They estimate that inflows into spot bitcoin ETFs will be about $1 billion in the first few days and reach $2.4 billion in the first quarter.

WisdomTree

WisdomTree reapplied for a spot Bitcoin ETF in June after BlackRock submitted its application.

The firm, which manages about $98 billion in assets, said in its disclosure: “The bitcoin market is mature and has operating efficiencies and scale that are materially similar to mature global equity, fixed income, and commodities markets.”
WisdomTree amended its Bitcoin ETF application on November 16. The fund’s shares will trade on the Cboe BZK exchange under the ticker BTCW.

“There does seem to be some exciting momentum emerging, [and] we remain very focused on a spot bitcoin ETF,” Will Peck, head of digital assets at WisdomTree, said during the company’s October earnings call. “We believe this is the best execution for this asset class within traditional channels in the U.S., and we look forward to continuing to work with regulators on this.”

Invesco

Invesco also followed in BlackRock’s footsteps by reapplying for a spot Bitcoin ETF in June. The proposed ETF will be listed on the Cboe BZX exchange. The application was filed in partnership with Galaxy Digital and mirrors the duo’s 2021 Bitcoin ETF application.

The company amended its application earlier this fall, indicating it would continue its dialogue with regulators as they continue to consider a decision.

According to the Depository Trust and Clearing Corporation's listing, the ticker symbol is BTCO.

Fidelity

Fidelity joins the current spot Bitcoin ETF race as a re-filer, similar to Invesco and Ark. One of the reasons the proposed Bitcoin ETF stands out is its custodian: Fidelity Digital Assets Services. Unlike some competitors, it does not use Coinbase.

Fidelity Digital Assets has been providing custody and trade execution services since 2018, making it the company’s obvious choice for in-house custody.

The proposal was first submitted in late June, which means it also follows closely behind BlackRock. As early as 2021, Fidelity applied for a spot Bitcoin ETF, but it was blocked by the SEC in January last year.

The fund will trade under the ticker FBTC, according to the DTCC listing. Like Invesco, it will be listed on the Chicago Board Options Exchange.

Valkyrie

Valkyrie followed BlackRock in applying for a spot Bitcoin ETF at the end of June (a few days earlier than Fidelity).

The company also made several changes to its proposal. Unlike some of the other applicants, Valkyrie seems to be interested in its proposed ticker symbol BRRR – referring to “money printing machine.”

The ETF will be listed on Nasdaq alongside BlackRock’s proposed ETF. The two funds are the only ones listed on the Nasdaq exchange. As expected, Coinbase is listed as the proposed custodian for the fund.

The SEC last delayed the Valkyrie application in late September, and the next deadline is after the golden window proposed by Seyffart.

In an interview with Schwab Network, Steven McClurg, chief investment officer at Valkyrie, said he believes the price of Bitcoin (whether due to the halving or the launch of a potential spot Bitcoin ETF) could go as high as $100,000 next year.

Global X

Another “returnee,” Global X applied for a spot Bitcoin ETF in August after initially applying for one in 2021.

Like the others, it plans to list on the Cboe exchange with Coinbase as custodian. The initial filing with the SEC listed Coinbase as a surveillance-sharing partner, a move seen as an effort to appease regulators.

The filing was delayed back in November, with the SEC saying it needed more time to consider the application, which is not surprising.

Prior to the delay, Bloomberg Intelligence analyst Eric Balchunas posted on X that there were discussions between the SEC and possible spot Bitcoin ETF issuers about adding cash creation to the proposed ETF 19b-4 application, and the analyst said that these discussions were a "good sign."

Hashdex

Hashdex applied to hold spot Bitcoin in its Bitcoin futures ETF in late August. The application updated the name to Hashdex Bitcoin ETF “to reflect the fund’s updated investment strategy.”

It is one of the few companies that does not rely on Coinbase as a surveillance-sharing partner. Instead, it has chosen to use CME Group’s physical market exchanges to “acquire and settle” Bitcoin. It will also hold spot Bitcoin, Bitcoin futures contracts, and cash and cash equivalents. If the fund is converted, it will be listed on the New York Stock Exchange along with Grayscale.

The updated fund will trade under its futures ticker symbol DEFI.

Franklin Templeton

Financial services giant Franklin Templeton also joined the spot Bitcoin ETF race in September. It sought to list its fund on the Cboe BZ X exchange. Like most other applicants, the company chose Coinbase as its custodian.

The comment period for the proposed Bitcoin ETF opened in late November, leading some to believe that the SEC’s move to start soliciting comments early increases the likelihood that a Bitcoin ETF will be approved in early January.

Franklin Templeton wrote in its initial proposal that the ETF would be a “series” within the Franklin Templeton Digital Holdings Trust.

Pando Asset Management

The latest entrant in the spot Bitcoin ETF race, Pando submitted its proposal on November 29. If approved by the SEC, the ETF would be listed on Cboe – the exchange chosen by eight of the 13 companies that applied.

The company formally filed its 19b-4 earlier this week, officially placing it in the ETF race.

The Swiss asset manager has several crypto products trading on the SIX Swiss Exchange, but this will be its first time issuing a crypto ETF in the U.S.

Coinbase will serve as the fund's custodian, and Pando has appointed Bank of New York Mellon as the trust manager. Due to the late application, it is unclear whether Pando can launch an ETF at the same time as BlackRock or Ark if it is approved.