SEC’s Bitcoin ETF Update Deadline Today: Cash-Generate and Kind

As the cryptocurrency community awaits the potential approval of a Bitcoin (BTC) exchange-traded fund (ETF) in the United States in January, today has a significant deadline.

The US Securities and Exchange Commission (SEC) said last week that Bitcoin ETF applicants must file their final S-1 amendment by December 29. The regulator forced them to sign an agreement with the Authorized Participant (AP) and set aside the funds. – Create a redemption model that you love.

The deadline means that today, the community will determine which of the 14 applicants for Bitcoin ETF filers will be in the first wave of BTC ETF approvals expected in early January.

According to Eric Balchunas, senior ETF analyst at Bloomberg, many ETF applicants have updated their filings with a cash-based redemption model. As of December 22, seven applicants had their records adjusted to cash-generating, while the remaining seven included cash-generating and in-kind models in their registration statements.

Most existing ETFs involve in-kind creation, meaning that when intermediaries want to create new ETF shares, companies like BlackRock issue them using real assets like Bitcoin.

“And that's how 90% of ETFs work. Only 10% are cash,” Balchunas said in a December 28 interview with Cointelegraph.

The reason the SEC is looking for a cash model for a spot Bitcoin ETF is to reduce the number of intermediaries who can access the actual Bitcoin during the redemption and delivery process, the ETF analyst believes.

“They don't like the idea of ​​middleman broker-dealers touching bitcoin,” Balchunas said. “Many were going to create unregistered subsidiaries to act as substitutes for real broker-dealers, but the SEC didn't want to either,” said an ETF analyst.

The SEC wants to “close the ring a little more,” Balchunas said, adding that regulators are concerned about money laundering. And so he said.

“If it's Blackrock and Coinbase that mess with real bitcoin, you have more control over the bitcoin you own. […] They want a more closed system with fewer intermediaries touching the actual bitcoins.

Related: Spot Bitcoin ETF Will Be ‘Bloodbath' For Crypto Exchange, Says Analyst

In addition to the Create Cash option, ETF applicants must have some AP to date.

“The last I heard, a lot of deals haven't been signed yet, and I think most of them will be signed,” Balchunas told Cointelegraph, adding that his business is about two big companies that could be APs for everyone. Giant Jane Street and Virtu Financial.

On December 28, ARK and 21Shares did not name AP in their most recent Bitcoin ETF update.

“AP mentions a ton but doesn't name it, thinking it will come in the last effective update before launch. But we still don't know if they've signed a deal,” Balchunas wrote on X.

Additional reporting by Ana Paula Pereira.

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