Fidelity and SEC meet to discuss spot Bitcoin ETF application

The United States Securities and Exchange Commission (SEC) recently met with Fidelity to seek additional clarity on its spot Bitcoin (BTC) exchange-traded fund (ETF) application.

According to a filing published on December 7, two Cboe BZX Exchange representatives, along with six personnel from the SEC and nine individuals from Fidelity, discussed the workings of the Wise Origin Bitcoin Trust in a meeting. 

“The discussion concerned Cboe BZX’s proposed rule change to list and trade shares of the Wise Origin Bitcoin Trust under Cboe BZX Rule 14.11(e)(4). Fidelity also provided the attached presentation.”

The filing incorporated PowerPoint slides used during the meeting to illustrate the operational framework of the Bitcoin ETF.

“Arbitrage and hedge are more efficient with physical creations,” the filing stated while proposing the most effective strategy to the U.S. regulator:

“Self-clearing ETF market maker firms can facilitate efficient arbitrage in acting as Agency AP for non-self-clearing ETF market maker firms with Crypto Affiliates. Allowing for physical creation and redemption is critical to enhance trading efficiency and secondary market pricing for all participants.”

Fidelity submitted an application for a spot Bitcoin ETF to the SEC on June 19, shortly after BlackRock and several other asset managers filed for the product just days prior. 

However, the SEC rejected Fidelity’s application for a spot Bitcoin ETF in 2022.

This comes after recent news that the SEC is meeting with spot Bitcoin ETF applicants to discuss various aspects of applications. 

Cointelegraph recently reported that based on industry insider knowledge they were discussing “key technical details” related to U.S. exchanges listing shares of a spot Bitcoin ETF.

Related: Fidelity seeks green light for Ethereum ETF, following BlackRock’s filing

However, memos released by the SEC in November showed the Commission separately met with representatives of BlackRock and Grayscale.

There has been much speculation in recent times over when a spot Bitcoin ETF will be approved. 

Hashdex, one of the applicants among the 13 asset managers, anticipates to see the first U.S. spot Bitcoin ETF by the second quarter of 2024.

“The exact timing of a spot Bitcoin ETF in the U.S. remains unclear, but in 2023, the narrative around this product switched from a question of ‘if’ to a matter of ‘when,’” said Hashdex’s U.S. and Europe head of product Dramane Meite.

Meanwhile, Bloomberg ETF analysts Eric Balchunas and James Seyffart remain confident that January 10 will mark the simultaneous approval of all spot Bitcoin ETFs. This aligns with the SEC’s deadline to either approve or deny ARK Invest’s application.

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