The Exciting Bitcoin ETF Narrative

After several years of anticipation, the possibility of a spot bitcoin ETF is stirring up excitement among institutional and retail investors. This regulated financial product offers an easier avenue for investors to gain exposure to bitcoin’s price without directly investing in the asset.

Implication of the SEC’s Deadline

The U.S. Securities and Exchange Commission (SEC) faces a crucial deadline of January 10th, which is the final date for approving Ark 21 Shares’ application. This deadline carries significant weight, as it is also the last opportunity for the SEC to act on numerous outstanding applications.

Potential Approval Indicators

Various indicators suggest that an approval may be imminent. Ongoing discussions between SEC staff, exchanges, and prospective issuers, as well as a surge in filings, point to a possible breakthrough. Recent meetings between SEC staff and representatives from the New York Stock Exchange, Nasdaq, and Cboe Global Markets further indicate a shift towards approval.

In recent weeks, SEC staff have engaged with issuers to address different aspects of their S-1 filings, including the implementation of a cash creation and redemption model, a notable departure from the traditional in-kind model. This shift has sparked debates among industry players, with some arguing that the SEC should allow in-kind creation.

Procedural Steps and Ominous Signals

On a noteworthy Wednesday, Fidelity filed a form 8-A, a crucial step enabling exchanges to list shares. While not an indication of immediate approval, this step sets the stage for potential future trading activities. Analysts, such as James Seyffart from Bloomberg Intelligence, emphasize the pivotal role of 19b-4 and S-1 approvals in dictating the fate of ETFs.

Amidst the growing buzz, the T-REX Group filed for a series of inverse and long spot bitcoin ETFs, banking on the anticipation of a spot trust product approval. These signals, though not definitive, collectively point towards a promising outlook for the ETF.

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