2023 Bitcoin Spot ETF Application

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In June 2023, the asset management giant BlackRock submitted an application for the iShares Bitcoin Trust, initiating a new round of competition for Bitcoin Spot ETF applications. Encouraged by BlackRock's move, several investment/asset management institutions joined this competition. As of August 2023, a total of 8 institutions, including BlackRock, have submitted applications for Bitcoin Spot ETFs to the SEC.

Summary of 2023 Bitcoin Spot ETF Applications

According to the process outlined by the SEC for Bitcoin Spot ETF applications, the application response time will be calculated after the SEC publishes 19b-4 in the Federal Register.

The total response time for the SEC's decision on a Bitcoin Spot ETF application is 240 days. During this period, there will be 3 rounds of public comments. The intervals between these comment periods are 45 days, 45 days, 90 days, and 60 days, respectively.

In other words, before the SEC issues a final decision (approval or rejection), they have the option to delay the decision three times during the comment periods. Additionally, the SEC retains the authority to approve or reject the application at any point during the resolution.

Below is the specific application process for a Bitcoin Spot ETF:

Bitcoin Spot ETF Application Process

Taking BlackRock as an example, the SEC published the 19b-4 form for iShares Bitcoin Trust on July 19th in the Federal Register. Therefore, counting 45 days from July 19th leads to the deadline for the first comment period for iShares Bitcoin Trust, which is September 2nd. If the SEC decides to delay the resolution before this deadline, the next comment period will be extended by another 45 days. The final response date for iShares Bitcoin Trust, after 240 days, will be March 15, 2024.

Below, we have listed the specific application information for these 8 institutions, including the project name, listing exchange, sponsor, trustee, custodian, application timeline, and historical application status.

BlackRock

ETF Name: iShares Bitcoin Trust

Exchange: Nasdaq

Sponsor: BlackRock Fund Advisors

Trustee: Delaware statutory trust

Bitcoin Custodian: Coinbase Custody Trust Company, LLC

Cash Custodian: Bank of New York Mellon

The combination of Bitcoin Custodian and Cash Custodian is collectively referred to as the Trustee.

Application Timeline:

  • Nasdaq submitted the proposed rule change to the SEC on June 29, 2023.
  • Notice publication date in the Federal Register: July 19th.
  • First comment period deadline: September 2nd.

Historical Application Status: None

Fidelity

ETF Name: Wise Origin Bitcoin Trust

Exchange: Cboe BZX Sponsor: FD Funds Management LLC

Trustee: Delaware Trust Company

Administrator: Fidelity Service Company, Inc. (FSC)

Transfer Agent: Third-party organization (No further details)

Marketing Agent: Fidelity Distributors Corporation

Bitcoin Custodian: Fidelity Digital Assets Services, LLC (FDAS)

Application Timeline:

  • Cboe BZX submitted the proposed rule change to the SEC on June 30, 2023.
  • Notice publication date in the Federal Register: July 19th.
  • First comment period deadline: September 2nd.

Historical Application Status:

Fidelity previously submitted a Bitcoin Spot ETF application in May 2021, which was rejected in February 2022.

Ark Invest

ETF Name: ARK 21Shares Bitcoin ETF

Exchange: Cboe BZX

Sponsor: 21Shares US LLC

Trustee: Delaware Trust Company

Cash Custodian (Transfer Agent): Bank of New York Mellon

Administrator: Bank of New York Mellon

Market Agenting: Foreside Global Services, LLC

Custodian: Coinbase Custody Trust Company, LLC

Assistant of Marketing: ARK Investment Management LLC

Application Timeline:

  • Cboe BZX submitted the proposed rule change to the SEC on April 25, 2023.
  • Notice publication date in the Federal Register: May 15th.
  • First comment period deadline: June 29th (SEC decided to delay the decision).

Reason for delay: The Commission determined that additional time was needed to consider issues raised in the proposed rule change, thus extending the decision timeline.

Exchange submitted Amendment No. 2 on June 30th; Amendment No. 3 was submitted on July 11th.

  • Second comment period deadline: August 13th (SEC decided to delay the decision).

On August 11th, SEC released a notice soliciting comments on Amendment No. 3, further extending the decision timeline.

Historical Application Status:

Ark Invest previously submitted two BItcoin Spot ETF applications in 2021 and 2022, both of which were rejected.

Invesco

ETF Name: Invesco Galaxy Bitcoin ETF

The name "Galaxy" is derived from the ETF's tracking of the Bloomberg Galaxy Bitcoin Index.

Exchange: Cboe BZX

Sponsor: Invesco Capital Management LLC

Trustee: Delaware Trust Company

Custodian: Third-party custodian and qualified custodian in the United States (No further details)

Administrator: Established global fund manager (No further details)

Transfer Agent: Third-party institution (No further details)

Application Timeline:

  • Cboe BZX submitted the proposed rule change to the SEC on June 30, 2023.
  • Notice publication date in the Federal Register: July 19th.
  • First comment period deadline: September 2nd.

Historical Application Status:

In 2021, Invesco and Galaxy jointly submitted a Bitcoin Spot ETF application, which was subsequently withdrawn in the same year.

WisdomTree

ETF Name: WisdomTree Bitcoin Trust

Exchange: Cboe BZX

Sponsor: WisdomTree Digital Commodity Services, LLC

Trustee: Delaware Trust Company

Administrator/Transfer Agent: U.S. Bank Global Fund Services

Custodian: U.S. Bank, National Association

Application Timeline:

  • Cboe BZX submitted the proposed rule change to the SEC on June 30, 2023.
  • Notice publication date in the Federal Register: July 19th.
  • First comment period deadline: September 2nd.

Historical Application Status:

WisdomTree previously submitted two Bitcoin Spot ETF applications, one in March 2021 and the other in January 2022, both of which were rejected.

VanEck

ETF Name: VanEck Bitcoin Trust

Exchange: Cboe BZX

Sponsor: VanEck Digital Assets, LLC

Trustee: Delaware Trust Company

Administrator/Transfer Agent: The State Street Bank and Trust Company

Assistant of Marketing: Van Eck Securities Corporation

Bitcoin Custodian: Third-party qualified custodian (No further details)

Application Timeline:

  • Cboe BZX submitted the proposed rule change to the SEC on June 30, 2023.
  • Notice publication date in the Federal Register: July 19th.
  • First comment period deadline: September 2nd.

Historical Application Status:

VanEck initially submitted a Bitcoin Spot ETF application in June 2018 and withdrew it in September 2019. Subsequently, VanEck submitted Bitcoin Spot ETF applications in March 2021 and June 2022, both of which were rejected.

Bitwise

ETF Name: Bitwise Bitcoin ETP Trust

Exchange: NYSE Arca

Sponsor: Bitwise Investment Advisers, LLC

Trustee: Delaware Trust Company

Cash Custodian (Transfer Agent): Third-party service provider (No further details)

Bitcoin Custodian: Third-party custodian (No further details)

Application Timeline:

  • NYSE Arca submitted the proposed rule change to the SEC on June 28, 2023.
  • Notice publication date in the Federal Register: July 18th.
  • First comment period deadline: September 1st.

Historical Application Status:

Bitwise submitted a Bitcoin Spot ETF application in October 2021 and was rejected in June 2022.

Valkyrie

ETF Name: Valkyrie Bitcoin Fund

Exchange: Nasdaq

Sponsor: Valkyrie Digital Assets, LLC

Trustee: Delaware Trust Company

Bitcoin Custodian: Third-party qualified custodian (No further details)

Administrator/Transfer Agent: U.S. Bank Global Fund Services

Application Timeline:

  • Nasdaq submitted the proposed rule change to the SEC on July 3, 2023.
  • Notice publication date in the Federal Register: July 21st.
  • First comment period deadline: September 4th.

Historical Application Status:

Valkyrie submitted a Bitcoin Spot ETF application in April 2021 and was rejected in December 2021.

All of the above information is from the SEC Federal Register.

Summary

  • Ark Invest's ARK 21Shares Bitcoin ETF was the earliest submission in this round of Bitcoin spot ETF applications. It has undergone two comment periods, both of which were delayed. The remaining ETFs are all awaiting their first comment period, all in early September.
  • Except for BlackRock, all other companies have prior experience with Bitcoin spot ETF applications. Among them, VanEck has the most extensive experience, having submitted three Bitcoin spot ETF applications since 2018.
  • All 8 ETF applications included the previously mentioned common rejection reason from the 2021 applications: the lack of a Surveillance-Sharing Agreement (SSA).
  • The proposed trading exchanges for the 8 ETFs are Nasdaq, Cboe BZX, and NYSE Arca. Among these, Cboe BZX is the most frequently proposed listed exchange, accounting for 5 out of 8 applications. This could be related to Cboe BZX's positive stance towards crypto assets and derivatives.
  • The level of detail in the application documents varies slightly among the 8 ETFs. For instance, Valkyrie and VanEck did not provide detailed custodian information.

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