What Does the SEC’s Bitcoin ETF Update Mean for Crypto Today?

Cryptocurrency Awaits Potential Approval of Spot Bitcoin ETF

As the cryptocurrency community awaits the potential approval of a spot Bitcoin (BTC) exchange-traded fund (ETF) in the United States in January, the U.S. Securities and Exchange Commission (SEC) has set a significant deadline of Dec. 29 for applicants to file final S-1 amendments. Furthermore, applicants must sign an agreement with an authorized participant (AP) and implement the cash-create redemption model favored by the SEC.

Today, the community will likely find out which of the fourteen spot Bitcoin ETF filers could be in the first wave of potential spot BTC ETF approvals, which is expected in early January. According to Bloomberg’s senior ETF analyst Eric Balchunas, many ETF applicants have updated their filings with the cash-create redemption model. As of Dec. 22, seven applicants had their filings fixed to cash-create, while the other seven included both cash-create and in-kind models in their registration statements.

The potential approval of a spot Bitcoin ETF is a big moment for the crypto community, and could lead to more Atom, ANKR, ACH, ALGO and other crypto projects gaining more attention and adoption.

Exploring In-Kind Creation and Cash Models for Spot Bitcoin ETFs

When intermediaries want to make new ETF shares, they often use an in-kind creation model, meaning that they give firms like BlackRock funds using actual assets like Bitcoin. According to ETF analyst Dave Balchunas, this is how 90% of ETFs work.

The SEC, however, wants the cash model for spot Bitcoin ETFs. This is to minimize the number of intermediaries that have access to the actual Bitcoin in the redemption and offering process. Balchunas believes that the SEC does not like the idea of broker-dealers touching Bitcoin and wanted to create unregistered subsidiaries to act in place of the actual broker-dealers.

The 1 inch crypto today, big for crypto, bat crypto today, big in crypto, atom crypto today, about crypto today, best crypto today, ankr crypto today, ach crypto today, and algo crypto today models for spot Bitcoin ETFs are all being explored to find the best option.

SEC Wants to Close the Loop

The SEC is trying to “close the loop a little more,” according to Balchunas, who heard of regulators being worried about money laundering. He said that in order to be approved for a Bitcoin ETF, applicants must have a determined Authorized Participant (AP) by today.

“The last I heard, there aren’t many agreements signed yet, but most of them will probably get signed,” Balchunas told Cointelegraph. He mentioned two big companies, Jane Street and Virtu Financial, that are likely to be the APs for everyone.

In their most recent spot Bitcoin ETF amendment filed on Dec. 28, ARK and 21Shares did not specify the name of an AP.

“AP mentioned a lot but didn’t name it. It looks like that information will come in the last effective update before launch. However, we still don’t know if they have signed an agreement,” Balchunas said on X.

Ana Paula Pereira provided additional reporting.