SEC And Exchanges Convene To Finalize Comments On Spot Bitcoin ETF Filings Ahead Of Eagerly Awaited Decision

JPMorgan Predicts SEC Will Be Forced To Greenlight Spot Bitcoin ETFs Following Grayscale’s Court Victory

The U.S. Securities and Exchange Commission (SEC) will today be formally engaging with top exchanges, including Nasdaq, CBOE, and NYSE, ahead of a much-anticipated decision on whether the regulator will give the regulatory nod to a spot Bitcoin exchange-traded fund (ETF).

SEC’s Meeting With Exchanges

All signs continue to point to a looming spot Bitcoin ETF approval.

The Securities and Exchange Commission is reportedly meeting with Nasdaq, CBOE, and NYSE today to straighten up the final details on the 19b-4 proposals made by Bitcoin (BTC) spot ETF contenders.

According to Bloomberg’s senior ETF analyst Eric Balchunas, the nature of these final talks between the SEC and the exchanges suggests the high likelihood of approval of the Bitcoin ETFs. Balchunas further observed that the SEC has been meeting with potential issuers of these ETFs offline, which is a deviation from the standard procedure of numerous refilings. These actions make a spot bitcoin ETF likely in January.

At the moment, the  U.S. securities watchdog has not announced whether it intends to greenlight, reject, or delay its decision on the several spot BTC ETF applications on its desk. But today, a mere suggestion that applications might get denied this month sparked a notable market drawdown.

Spot Bitcoin ETFs: Likely Denial Or Done Deal?

Over the past decade, Bitcoin ETF filers have been met with denial after denial from the SEC, with the agency always citing the potential for market manipulation as its main reason. TradFi giant BlackRock — the world’s largest asset management company — entering the race in June 2023, however, has altered the landscape.

After the last series of delays from the SEC, the commission now has until January 10 to decide on the 14 pending Bitcoin ETF applications. The SEC has even asked that applicants present their authorized participant (AP) agreement for their ETFs and some issuers have named JPMorgan Chase.

Yet, digital asset manager Matrixport is convinced that contenders haven’t met the requisite requirements for SEC approval to list spot BTC ETFs.

“The prevailing one-sided market consensus anticipates SEC approval of Bitcoin Spot ETFs by next week,” said Matrixport Head of Research Markus Thielen on Jan.2. “We, however, see an opportunity to trade against consensus, emphasizing the risk involved in positioning ahead of events with significant price implications.”

Thielen implied that none of the ETF applications currently in play will be approved this month.

Other analysts like the founder of Ludlow Street Advisors, James Murphy, expect “multiple approvals” on Jan. 10. Murphy posited that the SEC gave all the reasons they had for denying Grayscale’s bid to convert its flagship GBTC into a spot EFT and lost the case. He added:

“The SEC shot all their bullets against Grayscale. The Court would very likely find the SEC’s “new reason” pretextual, reject it and I would think sanctions against the SEC lawyers could be in play.” 

Meanwhile, the CBOE exchange has accepted the registration for listing the Fidelity Wise Origin Bitcoin Fund under the FBTC ticker, pending SEC approval.

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