Bitcoin ETF Odds Boosted to 99% by Bloomberg Analyst

Bitcoin ETF hopefuls and exchanges amended filings ahead of a key deadline

By: André Beganski

January 8, 2024

GM! This week: ETF issuers make last-minute changes to filings ahead of a key deadline, VanEck takes on a Bitcoin-centric pledge, Barry Silbert rights the ship that’s DCG, and someone sends Satoshi Nakamoto a little something.

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Issuers at the Gate

Amended filings submitted with the Securities and Exchange Commission (SEC) suggest a spot Bitcoin ETF could be on the horizon in the U.S. Expectations are that a regulatory green light could come sometime this week — as a key regulatory deadline barrels closer.

The SEC is due to decide on Ark Invest and 21shares’s application for its ARK 21Shares Bitcoin by Wednesday. And on Friday, several exchanges where Bitcoin ETFs would trade submitted new 19-4b filings, which the SEC is slated to decide on sometime this week, per Bloomberg News

On Monday, the ball kept rolling as several issuers submitted S-1s with the SEC, which are effectively prospectuses for the ETFs they hope to offer. If both sets of filings pass the SEC’s muster, then spot Bitcoin ETFs can begin trading a day after issuers' respective 19-4bs and S-1s are approved. As it stands, the SEC is expected to approve applications from multiple issuers at once.

On Monday, Bloomberg analyst James Seyffart told Coinage that there’s still a 1% chance a Bitcoin ETF is ultimately denied, citing the infinitesimally small edge case of intervention from President Joe Biden as one of the few factors that could hamstring issuers’ efforts. That being said, he believes that spot Bitcoin ETFs could begin trading this week — or early next week at the latest.

VanEck’s Bitcoin Pledge

As ETF hopefuls look to differentiate themselves from prospective competitors, asset manager VanEck set aside a portion of potential profits for Bitcoin Core developers. In addition to an initial $10k investment to Brink — founded in 2020 to support Bitcoin’s developer community — VanEck pledged to donate 5% of its Bitcoin ETF’s profits for the first 10 years.

Among the crypto faithful, VanEck’s move may be lauded. Yet several ETF hopefuls are trying to stoke interest in their products with razor-thin management fees. So far, 21Shares and Ark Invest, BlackRock, Bitwise, and Invesco and Galaxy Digital have detailed waivers for early inflows — trying to make their ETFs attractive by waiving costs for early investors.

Waivers aside, Bitwise’s proposed ETF has some of the lowest fees at 0.24%. On the opposite end of the spectrum, Grayscale plans on rolling out a product that charges fees of 1.5%, lowering that figure from 2% in a filing on Monday.

DCG Pays Up

Not long after Digital Currency Group (DCG) owner Barry Silbert resigned as chairman of Grayscale Investments, DCG informed the public last week that it has repaid all of its short-term loans to Genesis, a crypto lender that went bankrupt in 2022.

DCG is the parent company of both Genesis and Grayscale, the asset manager that bolstered ETF approval expectations with its courtroom victory over the SEC last year.  As Grayscale prepares for the potential approval of spot Bitcoin ETFs this week, the firm’s parent company is signaling it's on solid financial footing.

“In total, DCG has paid off more than $1 billion of debt to its creditors in just over a year,” the firm said in a statement. “With this milestone behind us, we’re looking forward to the next chapter of DCg and the future growth of our industry.” 

For Satoshi Nakamoto

Someone sent Bitcoin’s creator $1.2 million worth of Bitcoin last week, topping off a digital wallet that belongs to Satoshi Nakamoto with fresh funds. While the wallet has been dormant since Bitcoin’s pseudonymous creator stepped aside from Bitcoin’s development in 2010, blockchain onlookers pondered what the cause or goal of the transaction could be.

Effectively flipping Bitcoin into a digital well, the transaction happened last Friday around 2 a.m. on the East Coast. The person who sent 26.9 million to Satoshi Nakamoto’s wallet — the first ever registered on Bitcoin’s blockchain — paid a transaction fee of $100 as well.

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