Hashdex Names BitGo as Bitcoin ETF Custodian as Applicants Continue SEC Meetings
A bitcoin ETF may be approved or rejected in the first few days of the new year.
Arthur Hayes takes cautious view of Bitcoin ETF: it may pose a threat to the value and existence of Bitcoin
On December 23, BitMEX founder Arthur Hayes published a lengthy article on his blog, analyzing topics such as changes in Federal Reserve policy, regulated decentralized finance (Permissioned DeFi), real-world assets (RWA), and Bitcoin ETFs. Hayes believes that Bitcoin and cryptocurrencies are the best way to fight currency devaluation, comparing them to gold, the S&P 500 index, and the Nasdaq 100 index, and pointing out that Bitcoin has outperformed other risky assets since 2020.
Hong Kong: Ready to accept spot cryptocurrency ETF applications
Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority have reviewed the current policies for intermediary institutions wishing to engage in virtual asset related activities. In addition to existing cryptocurrency futures ETFs, the SFC stated that it is "prepared to accept authorization applications for other funds involved in virtual assets, including virtual asset spot trading exchange traded funds (VA spot ETFs)." In another notice released today, the SFC stipulated the requirements for funds to "directly invest in the same spot VA tokens that the Hong Kong public can trade on virtual asset trading platforms (VATPs) licensed by the SFC."
Approval window for spot Bitcoin ETF coming in less than 20 days
The approval window for spot Bitcoin ETFs will arrive in less than 20 days. Crypto influencer Crypto Rover has released a list of pending ETF applications and their respective details. Among the 13 spot Bitcoin ETF applications listed by Crypto Rover, 12 were submitted this year, with the latest application submitted on December 5th. Only one application was submitted before 2023, which is the Grayscale Bitcoin Trust, which was resubmitted on October 19th, 2021.<br>Crypto Rover's post shows that most proposed spot Bitcoin ETFs use Coinbase as the custodian, and 8 of the 13 have chosen the Chicago Board Options Exchange (CBOE) as the exchange to serve their purposes.
Georgetown University business professor urges SEC to allow spot Bitcoin ETFs to use physical creation method
James Angel, a business professor at Georgetown University, wrote a letter to the US Securities and Exchange Commission (SEC) on Tuesday regarding all proposals received by regulatory agencies regarding spot Bitcoin ETFs. Professor Angel urged the US SEC to avoid micro-management of the creation/redemption process for spot Bitcoin ETFs. Angel stated that now, the US SEC seems to be satisfied with allowing spot Bitcoin ETFs to trade in the US, and it should not waste this positive development by forcing a suboptimal product (cash-only creation/redemption) into the market. Media reports indicate that the spot Bitcoin ETF, which should have been approved earlier, is about to be approved. Completing this work quickly and correctly will release SEC resources to complete other more important things to promote the SEC's important mission.
The SEC’s strategic delay is to prevent any party from gaining a first-mover advantage. The Ethereum spot ETF may be approved in May next year.
On December 16th, James Seyffart, an ETF analyst at Bloomberg, reiterated in an interview on The Scoop podcast that he believes a Bitcoin spot ETF is likely to be approved before January 10th next year. It is reported that Seyffart has held this view since October this year, with a 90% chance of approval before January 10th next year, as the ETF applications from Ark and 21Shares (submitted in April, earlier than BlackRock) have reached the final deadline. The SEC has been strategically delaying to arrange various applications, or at least approving some applications at the same time, to avoid giving one company a first-mover advantage. However, Grayscale's ETF application is currently different from others and may not be approved at the same time.
Bloomberg ETF analyst Eric wrote an article explaining the difference between Bitcoin spot BTC being created by physical objects or cash.
On December 14th, Eric Balchunas, an ETF analyst at Bloomberg, replied to a question on social media about the difference between physically-backed and cash-backed Bitcoin ETFs. He stated that when there is excessive demand for Bitcoin ETFs, authorized participants (APs) will need to create new ETF shares. They can either provide cash to the ETF issuer in exchange for new shares (which the issuer will use to buy BTC) or provide BTC to the issuer in exchange for shares. Either way, new ETF shares are equivalent to new BTC purchases.<br>The SEC wants ETFs to be cash-backed only because this means that only the ETF issuer can handle BTC, not the authorized participants (registered brokers cannot). They may also be reluctant to let unregistered broker-dealer subsidiaries handle any part of it (because they are not registered). However, cash-backed Bitcoin ETFs are not ideal and undermine a major advantage of the ETF structure. But it is still better than nothing, and hopefully they will soon be resolved in a physically-backed manner.
A Year Of Progress
The interlocking dominos seem to have fully played out. The reason to be very bullish is that the vast majority of significant events in 2023 were good news and the blockchain industry made meaningful, necessary progress.
Taiwan Financial Supervisory Commission: Taiwan version of cryptocurrency ETF will be gradually relaxed depending on market conditions
Financial Supervisory Commission of Taiwan stated that due to the significant price volatility of cryptocurrencies and virtual currencies, countries are still exploring this area. The Commission will monitor global trends related to cryptocurrencies, collect and research the development of futures and ETFs for foreign cryptocurrencies, and gradually relax regulations based on market conditions.
Greeks.live: Rising expectations focus on ETF approval in January
Greeks.live stated that the volatility of cryptocurrencies has significantly decreased this week. Bitcoin touched $38,000 three times after last week's monthly settlement, but ultimately failed to hold its ground. Looking at option data, the put/call ratio is relatively low, indicating that this week's main trading is focused on call options, with the Maxpain point close to the strike price. As the upward trend becomes increasingly tepid, the skewness level of options gradually decreases. Fewer and fewer investors are bullish on short-term gains, with expectations of an increase mainly focused on the approval of ETFs in January.
