SEC And Fidelity Convene For Talks On Spot Bitcoin ETF Application

The US Securities and Exchange Commission (SEC) and Fidelity Investment have recently met to discuss the company’s application for a spot Bitcoin ETF. This development comes amid engagements between the US top securities regulator and multiple asset managers looking to launch the same product, serving as an indication of incoming approvals. 

Fidelity Presents Bitcoin ETF Workflows, Updates Spot ETF Filing

According to an official memo from the SEC, the said meeting was held on December 7, in which six representatives from the US regulator were present alongside nine personnel from Fidelity and two executives from the Cboe BZX Exchange – the listing sponsor of Fidelity’s proposed spot Bitcoin ETF. 

During the dialogue, Fidelity shared a presentation named the Bitcoin ETF workflows, which showed the operational model of its Wise Origin Bitcoin Trust, highlighting its in-kind creation and redemption system. 

In this presentation, the asset manager emphasized the significance of enabling physical creation and redemption to improve trading efficiency and secondary market pricing for all participants.

Furthermore, Fidelity stated that arbitrage and hedge offered more efficiency when it came to physical creations and that self-clearing ETF market-maker firms can enhance efficient arbitrage by acting as Agency Authorized Participants (AP) for non-self-clearing ETF market-maker firms, particularly those associated with crypto affiliates.

Following this meeting, Fidelity has now updated the S-1 form in its filing with the SEC. Notably, Fidelity’s discussion with the securities market regulator comes after listing its spot Bitcoin ETF with the Depository Trust and Clearing Corporation (DTCC), all of which adds to increasing optimism regarding a potential approval. 

The Plot Thickens In The Spot Bitcoin ETF Saga 

The approval of a spot Bitcoin ETF continues to gather more interest as many predict it will boost the institutional demand for the premier cryptocurrency with various analysts predicting a massive surge in the token’s price to over $100,000. 

Aside from Fidelity Investments, the SEC has also met with other asset managers in recent weeks, notably BlackRock, Grayscale, and Invesco, who are also looking to launch a spot Bitcoin ETF. 

Based on a recent report by Reuters, these discussions have centered around key technical aspects of the proposed ETF, including custody arrangements, investor risk disclosure, and creation and redemption mechanisms.

Meanwhile, other prominent names in the ring, such as Hashdex and VanEck, have been updating their various applications, showing signs of preparation for an incoming greenlight. 

According to Bloomberg analyst, James Seyffart, the likeliest timeline for the approval of a spot Bitcoin ETF is January 5 to January 10, with the SEC potentially passing up to nine applications within this timeframe.

At the time of writing, Bitcoin continues to trade at around $44,318, picking up an impressive 14.25% gain in the last seven days. 

Featured image from Wall Street Journal, chart from Tradingview