In a significant development for the cryptocurrency market, asset management giants BlackRock, Valkyrie, and Van Eck have submitted amended S-1 forms to the United States Securities and Exchange Commission (SEC) on the final day of consideration in January 2024. These revisions pertain to their previous applications to create Bitcoin exchange-traded funds (ETFs), a move that has been highly anticipated in the financial industry.
Cash-only model emphasised by Van Eck
Van Eck’s amended application highlights a key aspect that aligns with the SEC’s preferences. The firm states that “Financial firms that are authorised to purchase or redeem Shares with the Trust (known as ‘Authorised Participants’ or ‘APs’) will deliver only cash to create Shares and will receive only cash when redeeming Shares.” This commitment to a cash-only model reflects the SEC’s cautious stance on cryptocurrency-related financial products.
BlackRock, the world’s largest asset manager, has made a significant stride by naming Jane Street and JPMorgan Securities as “authorized participants” in its proposed spot Bitcoin ETF application. BlackRock has already stated its intent to follow a cash-only model. The company further solidified its commitment to the cryptocurrency space by settling a trade on JPMorgan’s Tokenized Collateral Network service in October.
Valkyrie’s choice of authorised participants
In a move mirroring BlackRock’s strategy, Valkyrie has also appointed authorised participants in its revised S-1 application. Jane Street Capital and Cantor Fitzgerald have been selected to play this crucial role. Additionally, StoneX Financial will serve as Valkyrie’s lead market maker, indicating a comprehensive approach to launching a Bitcoin ETF.
Bloomberg ETF analyst Eric Balchunas commented on the developments, stating, “Looks like we have our first horse at the starting gate,” referring to BlackRock’s potential chances of receiving SEC approval.
Balchunas had earlier expressed his expectation that the SEC would make decisions on the outstanding spot Bitcoin ETF filings by January 10, 2024. Should these ETFs receive approval, trading is likely to commence shortly thereafter, marking a significant milestone in the integration of cryptocurrencies into traditional financial markets.
Competitive landscape of Bitcoin ETF applications
Several prominent players in the asset management industry have submitted S-1 applications for spot Bitcoin ETFs, reflecting the growing interest in offering cryptocurrency exposure to investors. Notable applicants in addition to BlackRock, Van Eck, and Valkyrie include Grayscale, Bitwise, WisdomTree, Invesco, Galaxy, Fidelity, ARK Invest, Franklin, Hashdex, Global X ETFs, and Pando Asset.
The competition among these firms underscores the increasing acceptance of cryptocurrencies as legitimate investment assets. As the SEC evaluates these applications, the outcome will shape the future landscape of cryptocurrency investments within traditional portfolios.
