In Attempt to Satisfy SEC, Bitcoin ETF Refilings Spearheaded by Fidelity

Updated: 02 July 2023

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Fidelity Investments took the lead on Friday afternoon in a spate of recent activity, as they, alongside a few other firms, submitted a renewed series of applications for a Bitcoin spot exchange-traded fund (ETF). This follows an indication by the US Securities and Exchange Commission (SEC) that the original submissions lacked adequate details. Invesco, VanEck, 21Shares, and WisdomTree were also part of this move, together with three other firms, all vying to pioneer the launch of US spot Bitcoin ETFs. BlackRock Inc. instigated this sequence with an unexpected filing for such a fund in mid-June.

Each firm that resubmitted on Friday specified that market surveillance for their funds would be facilitated by Coinbase Global Inc. This significant detail was absent from their former applications.

A deciding factor in obtaining SEC approval for a spot Bitcoin ETF might be robust crypto market surveillance. Such surveillance could significantly cut down on fraud and market manipulation, issues that have led to the SEC’s rejection of about 30 Bitcoin spot ETF applications so far.

Coinbase is also projected to supply various services for other prospective fund issuers, as informed by an insider who chose to remain anonymous due to not having the authorization to disclose this publicly. Apart from BlackRock, these firms include Valkyrie and Bitwise. 21Shares mentioned in a recent submission that custody services would be provided by Coinbase as well. The other issuers refrained from confirming any involvement by Coinbase.

Applications for Spot-Bitcoin ETFs in 2023

ETF Name	Issuer	Filing Date
ARK 21Shares Bitcoin ETF	ARK, 21Shares	4/25/23
iShares Bitcoin Trust	BlackRock	6/15/23
Bitwise Bitcoin ETP Trust	Bitwise	6/16/23
Invesco Galaxy Bitcoin ETF	Invesco	6/20/23
WisdomTree Bitcoin Trust	WisdomTree	6/20/23
Valkyrie Bitcoin Fund	Valkyrie	6/21/23
VanEck Bitcoin ETF	VanEck	6/22/23
Wise Origin Bitcoin Trust	Fidelity	6/29/23

Source: Bloomberg, SEC

The flood of applications has had a positive impact on token prices, a welcome development for cryptocurrency enthusiasts. The prospect of cryptocurrencies being more readily available to regular investors has sparked excitement. Bitcoin reclaimed a value above $30,000 in June and is at its highest trading levels since last year. As of Friday, the token traded around $30,400, still less than half of its record-high of nearly $69,000 achieved in November 2021. However, these rule filings will only take effect once the SEC gives the green light.

Coinbase’s partnership with the proposed ETFs could result in a surge in revenue, especially when the cryptocurrency exchange industry is grappling with reduced volumes. Coinbase’s revenue was below half of 2021’s figure, a year when the industry experienced a bull market. This news arrives amidst Coinbase’s ongoing dispute with the SEC, which alleges the firm operated an illegal exchange.

After BlackRock submitted their ETF filing in mid-June, optimism in the market led to seven more companies submitting or resubmitting applications for spot ETFs, anticipating a shift in the SEC’s longstanding stance against such funds. Indicating a possible change of heart, the SEC did greenlight ETFs linked to Bitcoin futures in 2021.