Fidelity in Talks with SEC for Spot Bitcoin ETF
The investment powerhouse Fidelity engaged in substantive talks with the SEC regarding a potential Bitcoin ETF on December 7.
In an intriguing move, Fidelity presented an exhaustive outline titled “Bitcoin ETF Workflows,” delving into the nitty-gritty of “In-Kind” creation and redemption models during the discussion.
Emphasizing the advantages of physical creations, Fidelity highlighted the efficiency of arbitrage and hedging through this method. They particularly spotlighted the role of self-clearing ETF market maker firms in facilitating efficient arbitrage. These firms, acting as Agency AP for their counterparts without self-clearing capabilities but with Crypto Affiliates, were seen as pivotal players. Fidelity underscored the significance of enabling physical creation and redemption to significantly enhance trading efficiency and foster improved secondary market pricing for all involved stakeholders.
The Bitcoin market has experienced a substantial surge in recent weeks, partly due to the anticipation surrounding the SEC’s impending decision on proposed spot ETFs. Amid a flurry of amendments to filings and discussions, regulators and asset managers appeared to be dissecting the technical intricacies of how these prospective funds would function in the event of approval.
Observations made by Bloomberg Intelligence analyst James Seyffart regarding VanEck’s proposed spot Bitcoin ETF shed light on a significant aspect. Seyffart highlighted that the “create/redeem language includes both in-kind and cash,” indicating a potential inclusion in S-1 filings. However, he raised a point about the likelihood that initial 19b-4 approvals might limit creations to cash, despite indications suggesting otherwise in the filings.
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In a significant development, Fidelity submitted an amended S-1 form to the SEC for its proposed spot fund, further underlining the ongoing conversations and meticulous examination of technical aspects critical to potential ETF approvals.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
