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SEC Poised to Approve First Spot Bitcoin ETF by January 10

Big money management firms anticipate SEC approval of the first spot Bitcoin ETF by January 10 as recent guidance from SEC officials has provided optimism for a positive decision. The SEC’s final deadline for the spot Bitcoin ETF decision is January 10, 2024. The application in question was submitted by Ark Investment Management in collaboration with 21Shares.

Multiple Firms Filed Applications

Approximately a dozen firms, including BlackRock and Fidelity, have filed applications for a spot Bitcoin ETF. Industry executives believe the SEC might approve multiple spot Bitcoin ETF applications at once. A spot Bitcoin ETF would offer retail investors lower cost access to the largest cryptocurrency compared to futures-based Bitcoin ETFs.

Desire for Regulated Access

Such ETFs would also allow investment through regulated avenues instead of unregulated exchanges, trading on the New York Stock Exchange and Nasdaq.

SEC Insists on Cash Redemptions

The SEC wants spot Bitcoin ETF applicants to use cash for ETF share transactions instead of Bitcoin itself. This differs from “in-kind” transactions that would allow direct exchange of Bitcoin for ETF shares. Cash redemptions complicate the process and create taxable events, eliminating some tax benefits that come with in-kind transactions. Some firms, like Grayscale, are pressing the SEC to consider both in-kind and cash redemption mechanisms.

BlackRock’s Efforts

BlackRock, with over $9 trillion in assets, has prioritized getting SEC approval for its proposed Bitcoin ETF. CEO Larry Fink views Bitcoin as comparable to gold and sees the approval as democratizing and cost-reducing for investors. BlackRock has had five meetings with the SEC on its application, with the most recent being on Tuesday. Overall, the SEC has held about 24 meetings with various ETF applicants.

Industry insiders think it’s unlikely that the SEC will deny all applications, especially after a recent US Court of Appeals ruling favored Grayscale, instructing the SEC to reconsider their previously rejected application.

For more on the potential spot Bitcoin ETF approval, see: https://www.foxbusiness.com/markets/sec-could-make-crypto-history-in-new-year-with-first-spot-bitcoin-etf-approval

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