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SEC Approval Window Open for Spot Bitcoin ETFs by Early 2024

The U.S. Securities and Exchange Commission (SEC) is anticipated to approve spot Bitcoin exchange-traded funds (ETFs) in early 2024. Market experts expect the first set of approvals between January 8th and 10th, 2024.

Key Takeaways

  • The SEC is anticipated to approve the first spot Bitcoin ETF between January 8th and 10th, 2024.
  • Not all ETF issuers are likely to be approved during this time frame.
  • The SEC recently held meetings with spot Bitcoin ETF candidates to discuss approval details.
  • The SEC prefers ETFs that acquire Bitcoin through cash purchases from reputable exchanges.
  • Cash creations could lead to taxable events, making them less attractive to some investors.
  • The rigorous regulatory demands have slowed down crypto adoption in the U.S.

The SEC held meetings with spot Bitcoin ETF candidates on December 21st, indicating that approvals may be near. The SEC generally favors ETFs that acquire Bitcoin through cash purchases from reputable exchanges (see external link). Cash-only transactions help ensure transparency of the original Bitcoin sources. However, cash creations could result in taxable events for the ETF, making them less attractive to some investors.

One issuer, ARK/21Shares, had proposed using in-kind transactions but has since complied with the SEC’s preference for cash creations. This suggests the SEC’s requirements are firm. Updates to filings showing compliance with the SEC’s cash creation and authorized participant agreements may signal that an ETF issuer is close to approval (see Eric Balchunas’ thread).

Recent Updates Point to Coming Approvals

Several recent tweet threads point to the January 2024 approval window (see here) and here. However, not all ETF issuers are expected to be approved during this period. The rigorous regulatory demands have been slowing down the broader adoption of cryptocurrencies in the United States.

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