On August 29th, there was good news about the Bitcoin spot ETF application.
Court documents show that the US Court of Appeals for the District of Columbia Circuit ruled that “administrative rulings must be consistent and predictable, following the basic principle that similar situations should be treated similarly in order to avoid arbitrariness and inconsistency. New York Stock Exchange Arca has proven that Grayscale is similar to Bitcoin futures ETF in terms of relevant regulatory factors. The SEC failed to fully explain why it approved the listing of two Bitcoin futures ETFs but did not approve Grayscale’s Bitcoin ETP proposal. It is illegal to have different regulatory treatment for similar products without a consistent explanation.”
Therefore, the US Court of Appeals for the District of Columbia Circuit revoked the previous order of the US SEC and required the US SEC to accept Grayscale’s application to convert GBTC into an ETF for review. In 2021, Grayscale and NYSEArca applied to convert GBTC into an ETF, but the US SEC rejected the application in June 2022.
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Although the ruling of the US Court of Appeals for the District of Columbia Circuit does not necessarily mean that the US SEC will approve the application for Grayscale or other issuers of Bitcoin spot ETFs, it at least opens the door for future approvals.
First, let’s understand the concept of ETF, Bitcoin ETF, and Bitcoin spot ETF, as well as why Bitcoin spot ETFs have a significant impact on the cryptocurrency industry. Then, let’s take a look at the current Bitcoin spot ETF applications, their approval timelines, and deadlines.
What is a Bitcoin spot ETF? Why is it important?
ETF, short for Exchange Traded Fund, is a hybrid between stocks and mutual funds that provides a basket of assets such as stocks, bonds, or commodities that can be traded on major stock exchanges. Investors can buy and sell them like ordinary stocks.
A Bitcoin ETF is a combination of ETF and Bitcoin, essentially an ETF that tracks its underlying Bitcoin assets. Bitcoin ETF allows traditional investors to invest in BTC in a way they are familiar with.
Based on the underlying assets, Bitcoin ETFs can be divided into Bitcoin futures ETFs and Bitcoin spot ETFs.
Bitcoin futures ETF tracks Bitcoin futures contracts, while Bitcoin spot ETF tracks Bitcoin spot, requiring each share of ETF to be backed by physical Bitcoin. Moreover, compared to directly holding BTC, investors of Bitcoin spot ETFs do not need to undertake complex storage and security measures.
This means that a large number of investors can easily access Bitcoin assets, even if they do not personally hold BTC, but have ETF issuers and custodians hold it on their behalf.
It can be said that Bitcoin spot ETFs connect traditional finance and cryptocurrency to the greatest extent. Therefore, industry insiders generally believe that the approval of Bitcoin ETF is a great positive for the industry.
Bitcoin Spot ETF Application List
According to the U.S. SEC website, the following is a complete list of all Bitcoin spot ETF applications:
ARK 21Shares Bitcoin ETF (ARKB) by 21Shares & ARK
iShares Bitcoin Trust by BlackRock
Bitwise Bitcoin ETP Trust by Bitwise
VanEck Bitcoin Trust by VanEck
Wisdomtree Bitcoin Trust (BTCW) by Wisdomtree
Invesco Galaxy Bitcoin ETF by Invesco & Galaxy
Wise Origin Bitcoin Trust by Fidelity
Valkyrie Bitcoin Fund (BRRR) by Valkyrie
Bitcoin Spot ETF Timeline and Deadlines
According to the Bitcoin spot ETF application process on the SEC website, the SEC will start reviewing the Bitcoin spot ETF after the 19b-4 document is published in the Federal Register.
The SEC’s longest decision time for final approval or rejection (Final Deadline) can be up to 240 days.
The SEC may approve or reject the Bitcoin spot ETF application at any time during this period, or there may be three deadlines to delay accepting or rejecting the application.
These three deadlines (First, Second, Third Deadline) are the SEC’s three public responses, with intervals of 45 days, 45 days, and 90 days respectively.