Key Takeaways:
- BlackRock, Fidelity, WisdomTree, Invesco, and Valkyrie have named authorized participants for their potential Bitcoin ETFs.
- JPMorgan Securities, Jane Street, Cator Fitzgerald, & Virtu Securities are appointed as APs to procure Bitcoin for the asset managers.
- The SEC is anticipated to decide on ARK Invest and 21Shares’ spot Bitcoin ETF application by January 10.
On Friday, asset managers BlackRock, Fidelity, WisdomTree, Invesco, and Valkyrie filed updated S-1 forms with the US Securities and Exchange Commission (SEC), in which the firms named authorized participants (AP) for their yet-to-approved spot Bitcoin ETFs.
Authorized Participants are entities that can create and redeem shares of an ETF. They are some of the main players in the ETF market as they provide a large portion of the liquidity by obtaining the underlying assets required to create shares of the proposed fund.
Typically, ETF shares can be exchanged for a similar basket of securities that reflect the holdings of the fund, or for cash.
BlackRock and Fidelity Name JPMorgan and Jane Street As APs For Their Spot Bitcoin ETFs
Bloomberg reported on December 29, that BlackRock assigned JPMorgan Securities and quantitative trading firm Jane Street as its authorized participants. Both companies will be in charge of purchasing Bitcoin (BTC) on behalf of the asset manager, which is not legally allowed to obtain the cryptocurrency.
Matching BlackRock’s choices, Fidelity also named Jane Street and JPMorgan as its APs. Valkyrie tapped investment banking firm Cator Fitzgerald and Jane Street, while WisdomTree appointed Jane Street as its AP.
Meanwhile, Invesco said it plans to assign JPMorgan Securities and Virtu Securities as authorized participants for its proposed spot Bitcoin exchange-traded fund.
It is normal for ETF issuers to have multiple APs.
Eric Balchunas, senior ETF analyst at Bloomberg, noted that disclosing authorized participants is one of the final steps taken by ETF issuers before launching their funds.
In their S-1 filing with the SEC, Fidelity and Valkyrie revealed that the fees for their proposed spot Bitcoin ETFs will be 0.39% and 0.80%, respectively.
Invesco, which jointly filed its BTC spot ETF with crypto asset manager Galaxy Digital, said that it intends to waive the entire 0.59% sponsor fee on the first $5 billion for the first six months after listing its spot Bitcoin ETF.
US Securities and Exchange Commission Expected to Approve the First Spot Bitcoin ETF by Jan 10
However, Bitwise, VanEck, and ARK Invest & 21Shares, did not name APs or expense ratios in their amended S-1 filing this week.
The SEC had set December 29 as the deadline for making final amendments to the spot Bitcoin ETF proposals.
Issuers who didn’t meet the timeline would not be eligible for consideration in the first round of potential approvals early next month.
The securities watchdog is expected to decide on whether or not it will approve a Bitcoin-focused ETF for the US spot market between January 5 and 10.
This also happens to be the deadline by which the SEC must rule on the proposal by ARK Invest and 21Shares.
The amendments come amidst increased optimism that the SEC will finally approve spot Bitcoin funds.
The regulator who for long opposed the products, citing security concerns for investors, was dealt with a major blow in August when a court ruled in favor of asset manager Grayscale Investments.
At the time, the court said that the SEC’s decision last year to not allow Grayscale to convert its $17 billion Bitcoin Trust into a spot Bitcoin ETF was “arbitrary and capricious”. Grayscale had lined up Jane Street and Virtu Financial as APs for its planned fund.
In an X post on Friday, Grayscale CEO Michael Sonnenshein said that the firm had “been in this game a long time” and has had authorized participants “lined up since 2017”.
Experts Beleive There is a High Probability that the SEC Will Approve a Bitcoin ETF
President of 21Shares, Ophellia Snyder, said last month that there has been a positive change in terms of how the SEC has approached the latest round of Bitcoin spot ETF proposals.
She noted that the behavior change might result in an exciting “change of outcome”.
Furthermore, ARK Invest CEO Cathie Wood told Bloomberg earlier this week that while approval from the SEC isn’t a sure thing, she believes that the probability of it happening has gone up significantly.
At the time of writing, Bitcoin (BTC) is trading at $42,106 – down 1.3% in the last 24 hours.
