Focus Multiple firms amend their spot BTC ETF filings, JPMorgan predicts an approval by January 10 |Get all the essential market news and expert opinions in one place with our daily newsletter.Receive a comprehensive recap of the day’s top stories directly to your inbox.| ( [Kitco News](/)) – It was another busy week of developments on the cryptocurrency exchange-traded fund (ETF) front as spot Bitcoin ( [BTC](https://www.kitco.com/price/bitcoin)) ETF application amendments by large asset managers helped bolster the chances of approval sometime in the next several months.Asset management giant Fidelity filed to amend its Wise Origin Bitcoin Trust ETF with the Securities and Exchange Commission (SEC) late Tuesday, altering the wording to specify how it will safeguard customers’ Bitcoin in custody accounts and disclose risks related to the unstable regulatory environment around cryptocurrencies, among other factors.The amended filing from Fidelity follows a similar move last week by Invesco and Ark Invest, who amended their applications on Wednesday and Thursday, respectively.Analysts have suggested that the move by multiple ETF providers to make similar adjustments to their applications indicates the firms have been in discussions with the SEC about what is needed to gain regulatory approval.[According](https://twitter.com/SGJohnsson/status/1714394644283326946) to finance lawyer Scott Johnson, the recurring themes in the amendments that have been submitted so far include, “Specifying custodial arrangements in detail; Mechanics around hard forks; Valuation/pricing sources and adherence to GAAP; Risk disclosure around regulatory uncertainty,” and addressing issues related to the energy-intensive nature of Bitcoin mining.James Seyffart, an ETF analyst at Bloomberg Intelligence, [said](https://twitter.com/JSeyff/status/1714399430210621625) the similarity in amendments is “More proof that potential spot Bitcoin ETF issuers are in communication with SEC regarding changes/amendments required for SEC to consider approving.
Positive signs [in my opinion].” A follow-up [post](https://twitter.com/JSeyff/status/1714987065664766303) from Seyffart said that BlackRock also filed an updated Bitcoin ETF prospectus on Thursday.The filing is “likely their response to SEC comments like we’ve seen from Ark, Fidelity, and others,” he said, adding that it brings “more confirmation that issuers are in talks with the SEC.” Along with multiple firms adding amendments to already filed applications, Grayscale Investments filed a new application for a spot BTC ETF on Thursday.Grayscale [submitted](https://www.sec.gov/Archives/edgar/data/1588489/000119312523258940/d569843ds3.htm) an S-3 form registration statement with the SEC, which outlines the firm’s intent to list shares of its Grayscale Bitcoin Trust on the New York Stock Exchange (NYSE) Arca under the ticker symbol GBTC.In a [press release](https://www.grayscale.com/blog/legal-topics/gbtcs-s-3-filing-explained) that accompanied the filing, Grayscale explained that GBTC is “eligible to use Form S-3, a shorter filing that incorporates by reference its SEC disclosures and reports because its shares have been registered under the Securities Exchange Act of 1934 since January 2020 and it meets the other requirements of the form.” The firm noted that before GBTC can be converted into an ETF and issue shares on a regular basis, “NYSE Arca’s 19b-4 application must be approved, an exemption or other form of Regulation M relief must be available and the Form S-3 must be declared effective by the SEC.” “GBTC is ready to operate as an ETF upon receipt of these regulatory approvals, and on behalf of GBTC’s investors, Grayscale looks forward to working collaboratively and expeditiously with the SEC on these matters,” the firm said.
This new filing follows the recent decision in Grayscale’s lawsuit against the SEC, where a three-judge panel for the DC Circuit Court of Appeals [ruled that the regulator must review](https://www.kitco.com/news/2023-08-29/Grayscale-wins-court-ruling-in-battle-with-SEC-for-Bitcoin-ETF.html) the firm’s application to convert its Grayscale Bitcoin Trust to an ETF.In the opinion from Circuit Judge Neomi Rao, the judge said, “We Agree.The denial of Grayscale’s proposal was arbitrary and capricious because the Commission failed to explain its different treatment of similar products.
We therefore grant Grayscale’s petition and vacate the order.” Along with the new spot BTC ETF filing from Grayscale, Invesco and Galaxy Digital officially filed their 19b-4 paperwork with the CBOE for a spot Ether (ETH) ETF.
The “final deadline here is unknown for now, but likely to be somewhere around the first week of July,” Seyffart [said](https://twitter.com/JSeyff/status/1715386144945283382).“This is the 5th currently active spot Ethereum ETF filing.” When asked about the status of the various applications for a spot BTC ETF that the SEC is reviewing, SEC Chair Gary Gensler [said](https://www.youtube.com/watch?v=TV2-UJWwMiE), “I’m not going to pre-judge.
The staff is doing work on those multiple filings.” “What we have in front of us, just so that the viewing public understands, we have not one, but multiple, I think it’s eight or ten filings that the staff, and ultimately the Commission, is considering,” he said.“When an asset manager is seeking to take something public, these exchange-traded products need to register with the SEC, and they go through a filing, somewhat similar to going public, like an IPO.” “And so it’s really the work of our Division of Corporation Finance that gives feedback, our Division of Trading and Markets, of course looks at the filings,” he said.“This is a time-tested process that goes back decades.The staff of the SEC, it’s called the Disclosure Review Team, they respond and give feedback to potential issuers.” | | According to a [report](https://docsend.com/view/vzu8bmu5uh5d2dv6) from data analytics firm CryptoQuant, Bitcoin will become a $900 billion asset, and the total crypto market will grow by $1 trillion in the event that a spot BTC ETF is approved.“The next wave of institutional adoption for Bitcoin will come from the launch of spot ETFs,” they said.“We could expect about $150 billion will flow into the Bitcoin market once these ETFs are approved.
Based on the historical relationship between the total market capitalization and the realized capitalization of Bitcoin, if $150 billion in fresh money enters the Bitcoin market, it could increase Bitcoin’s market capitalization by $450 to $900 billion.” Spot BTC ETF applications currently on file.Source: [CryptoQuant](https://docsend.com/view/vzu8bmu5uh5d2dv6) “Although these ETFs are not expected to be approved this year, the probability that they will be approved by the final deadline (March 2024) has been growing as a result of favorable court rulings for Grayscale and XRP in their respective legal fights against the SEC,” CryptoQuant said.“The increase in the Bitcoin market capitalization we calculated implies the market cap would increase between 82% and 165% from the current level and that Bitcoin price could reach between $50k and $73k as a result of these inflows of fresh money.” According to a report released on Wednesday by JPMorgan, the gains for Bitcoin this week are due to increased optimism about the potential approval of multiple spot BTC ETFs, and the SEC’s decision to not appeal the recent Grayscale ruling brings approval of the applications closer.The JPMorgan analysts, led by Nikolaos Panigirtzoglou, said the timing of an approval is unclear, but should happen within months, and probably before January 10, which is the final deadline for the Ark 21Shares applications.They reiterated their view that the SEC will likely approve multiple applications at once rather than give any one application a “first mover advantage,” and said such a move could be beneficial for investors as it would encourage competition in regard to ETF fees.“Grayscale will likely face greater pressure to lower fees if the trust gets approval to be converted into an ETF,” the report said..
