Fidelity pitches spot Bitcoin ETF model to SEC as regulatory talks advance
The race to launch a spot Bitcoin exchange-traded fund (ETF) in the United States is heating up, and Fidelity is making its case to the U.S. Securities and Exchange Commission (SEC). According to a recent disclosure by the SEC, Fidelity met with the regulatory agency to discuss its spot Bitcoin ETF application.
The meeting, which took place on Dec. 7, included members of the SEC’s Division of Corporate Finance and representatives from both Fidelity and CboeBZX, the proposed exchange where Fidelity’s Wise Origin Bitcoin Trust could be listed and traded.
Fidelity’s proposed ETF model is structured to provide exposure to Bitcoin through a network of industry players with distinct roles. This includes authorized participants and broker-dealers who facilitate the creation and redemption of ETF shares, as well as unregistered crypto affiliates who hold and transfer the actual Bitcoin tied to the ETF. This intermediary setup allows market participants to gain price exposure to Bitcoin without directly handling the cryptocurrency.
The SEC’s recent meeting with Fidelity is part of a series of discussions with ETF applicants regarding key technical details. According to reports, the SEC is said to be in advanced stages of these talks and is likely to approve relevant ETF applications soon. The agency has also been in discussions with other ETF firms, including BlackRock, comparing cash and in-kind models for Bitcoin ETFs.
While there have been debates about the preferred model for Bitcoin ETFs, with some analysts favoring cash models over in-kind models due to regulatory considerations, recent reports suggest that some proposals will allow both options. Bloomberg ETF analysts have estimated a 90% chance that a spot Bitcoin ETF will be approved by January 2024, showing optimism for the potential launch of these investment products.
As the SEC evaluates the various applications for Bitcoin ETFs, the industry is eagerly awaiting the regulatory developments that could pave the way for wider adoption of cryptocurrency in traditional investment vehicles.
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