Five key pieces of information you must pay attention to now about Bitcoin spot ETFs

Source: Block Rhythm

As the approval of Bitcoin spot ETF approaches, the market’s attention is increasing day by day. Several asset managers are gearing up to prepare, while analysts and issuers are predicting that the U.S. Securities and Exchange Commission (SEC) may make a favorable decision on or before January 10.

This decision is not only The price changes related to Bitcoin will become a turning point for the entire cryptocurrency market. If the adoption of the Bitcoin spot ETF is inevitable, then how should we learn the news of its approval as soon as possible, and what information should we focus on?

How to quickly grasp the dynamics of ETFs?

In addition to turning on push notifications on professional financial news websites of news media, is there any other way to get the news faster than the media?

1. U.S. Securities and Exchange Commission (SEC) official website

You can register on the SEC’s official website and fill in your email address to get official news about Bitcoin ETF and other related matters as soon as possible and decision-making. As a regulatory agency, the information released by the SEC is the most authoritative and accurate.

2. Senior industry Experts and Analysts

Some well-known industry analysts, such as Bloomberg ETF analysts Eric Balchunas and James Seyffart, have in-depth research and insights on Bitcoin ETFs. Follow their Social media can provide you with more professional analysis and predictions, and turning on the little bell will also get the news as soon as possible.

3. Market price and trading volume

To be honest, market price is often the fastest signal. Any major news related to the Bitcoin ETF is likely to be quickly reflected in Bitcoin’s price and trading volume, or even start early. Therefore, paying close attention to changes in market prices and trading volumes is also an important means of obtaining information.

Group approval or individual approval

ETF analysts and issuers unanimously believe that the SEC will make a favorable decision on or before January 10, and January 10 will be the SEC’s final decision The deadline for ETF approval will determine whether to approve the Bitcoin spot ETF application submitted by Ms. Mu’s ARK Investment Management LLC and 21Shares.

It is difficult for the SEC to only approve a certain Bitcoin spot ETF. Just like the launch of Bitcoin futures in the past, if simply approving a certain one may cause a tilt in market share, the ETF launched later will By lowering some purchasing standards, which would lead to outflows from the market, the SEC needs to promote and maintain market fairness.

Therefore, in this round of January approvals, whether the SEC will approve only one or multiple Bitcoin ETFs is also one of the key points that the market is paying close attention to.

Authorized Participant AP: A key role in the ETF market

Authorized Participant (AP) plays a vital role in the exchange-traded fund (ETF) industry . These are typically large financial institutions, such as investment banks or market makers, who play an integral role in the ETF market and are responsible for maintaining ETF liquidity and market efficiency. APs' core responsibilities include creating and redeeming ETF shares, which means they have the authority to transact directly with the ETF provider, whether to create new ETF shares or eliminate existing ones.

In addition, AP plays a key role in maintaining consistency between market prices and net asset values. They help ensure that the market price of an ETF is close to the net asset value (NAV) of its underlying assets by creating or redeeming ETF shares when necessary, thereby reducing price deviations and improving market efficiency. AP also serves as a provider of market liquidity, making it easier for investors to buy and sell ETF shares through its creation and redemption activities. As large financial institutions, they are also responsible for managing the market and liquidity risks associated with the creation and redemption of ETF shares.

Given the complexities associated with ETF creation and redemption, APs are typically institutions with a high degree of expertise and market operations capabilities. In situations of high market volatility or low liquidity, the activities of APs are particularly important in ensuring the health of the ETF market. Through the AP mechanism, ETFs can more effectively track the performance of their underlying assets while providing investors with a more stable and reliable trading environment.

According to the latest information, most of the asset management companies that are applying for Bitcoin spot ETFs, including BlackRock, have selected and announced their respective authorized participants.

For example, BlackRock plans to select JPMorgan Securities and Jane Street as its authorized participants. Grayscale CEO posted on social media that Grayscale had already confirmed in the documents submitted in May this year that after GBTC was converted into a spot ETF, Jane Street Capital and Virtu Americas were the authorized traders (Authorized Participants) of its ETF.

Goldman Sachs is approaching BlackRock and Grayscale and negotiating to become an authorized participant (AP) for its spot Bitcoin ETF. According to Nate Geraci, president of The ETF Store, disclosed on social media, following Goldman Sachs, JPMorgan Chase is also negotiating with Grayscale to serve as an authorized participant of its spot Bitcoin ETF.

WisdomTree has filed the latest revised S-1 filing for its spot Bitcoin ETF, designating Jane Street Capital as the authorized dealer (Authorized Participant) for its spot Bitcoin ETF. Invesco Galaxy has appointed JP Morgan and Virtu Americas as authorized dealers for its spot Bitcoin ETF, which will charge no fees for the first six months. Fidelity named Jane Street an authorized dealer for its spot Bitcoin ETF, which charges 0.39%.

Fidelity named Jane Street Capital as one of its authorized participants. Invesco/Galaxy selected JPMorgan and Virtu as authorized participants. Valkyrie selected Jane Street and Cantor Fitzgerald as its authorized participants.

This information may change with subsequent approval processes and changes in each company's policies. But what can be seen is that Jane Street is the choice of almost all these asset management companies.

ETF fees: a key factor affecting investor choice

In the fierce competition for Bitcoin spot ETFs, the ETF fees set by each company are of decisive importance. This not only affects investors' choices, but also significantly affects the company's market competitiveness. ETF fees, as management costs borne by investors, are directly related to investment return, so when choosing ETF products, investors tend to give priority to options with lower fees.

With an ETF fee of 0.25%, VanEck leads the market with its low fees, making its products more attractive to price-sensitive investors. The low-fee strategy not only improves Fidelity's market competitiveness, but may also force other competitors to adjust their fee structures.

Fidelity's fee standard is 0.39%, and BlackRock's ETF fee standard is 0.3%, with 0.2% for the trailing 12 months.

Meanwhile, ARK 21shares charges 0.25%, with the first 6 months free. Invesco, while announcing its rate at 0.59%, has also chosen to waive fees for the first six months. It can be said that this is an aggressive market entry strategy aimed at quickly attracting a customer base and increasing market share. Such short-term rate concessions may appeal to investors looking for initial cost efficiencies.

Invesco Investments has also designated JP Morgan and Virtu Americas as authorized dealers for its spot Bitcoin ETF. This cooperation with well-known financial institutions may further enhance the appeal of its products.

At the same time, Fidelity Investments selected Jane Street as the authorized dealer of its spot Bitcoin ETF and kept its low fee rate unchanged. This reflects its focus on maintaining cost competitiveness while also focusing on Cooperation with high-quality trading partners.

In general, competition in the Bitcoin spot ETF market is not only reflected in the quality of products and services, but also in fee strategies. The level of fee rates directly affects investors’ choices, and in this competitive market, major companies use different fee strategies to attract and retain customers. The effectiveness of these strategies will be verified in future market performance.

Picture source: @JSeyff

The moment of transition for GBTC: is it simultaneously approved to become a Bitcoin spot ETF?

Whether GBTC will be approved to convert into a Bitcoin spot ETF on the same day as other companies is an important issue that the market is paying attention to. Current signs, including executive social media tweets, company filings, and other public actions and messaging, appear to suggest that GBTC is preparing to make the switch on the same day that other companies are launching Bitcoin spot ETFs. and listing.

GBTC (Grayscale Bitcoin Trust), as one of the largest Bitcoin trust products on the market, currently manages approximately US$27 billion in assets. This size not only makes it a significant player in the cryptocurrency space, it also makes it extremely influential in the ETF market as a whole. Once GBTC is successfully converted into a spot Bitcoin ETF and listed, it will immediately become a top 60 ETF by AUM, a jump that will have a significant impact on the market.

This conversion of GBTC not only means changes in its product structure and regulatory framework, but may also attract more investors seeking traditional financial products and services. This conversion will transform GBTC from a more closed trust structure to a more open and liquid ETF structure, which is an important attraction for investors looking to invest in Bitcoin through traditional financial channels.

Overall, the conversion and listing of GBTC will be an important milestone for the Bitcoin ETF market. It will not only increase the selection of spot Bitcoin products on the market, but may also promote the further maturity and development of the entire industry. . If GBTC can be approved for listing on the same day as other companies, this will be an event of great significance to the entire industry. Its influence and market position will bring new vitality and competition to the Bitcoin ETF market.

Funding Forecast: The amount of capital Bitcoin ETFs are about to attract

There are rumors that BlackRock will invest $2 billion. On January 6, Matthew Sigel, VanEck’s head of digital asset research, spoke on Twitter Space and said that according to informed sources, BlackRock has raised $2 billion in funds from existing Bitcoin holders, and these funds hope to Converted to a spot Bitcoin ETF within the first week.

In response, Bloomberg ETF analyst Eric Balchunas said that if this is true, $2 billion will break all first-day/week trading volume and management size records for ETFs. Now it has learned from another source that BlackRock has indeed prepared the money to be put into the ETF on day one.

In addition, starting from August last year, Ark Invest began to gradually reduce its position in GBTC. At that time, many people speculated that the reason why the shrewd sister began to reduce her position in GBTC may be to fund her own Bitcoin spot ETF fund. prepare for.

According to ARK Fund position data, ARK Fund reduced its holdings by a total of 146,242 GBTC in October without any purchases. In September, 11,249 GBTC were bought, but 67,494 GBTC were sold. In August, 106,413,910 GBTC were bought, but 108,776,240 GBTC were sold.

By December, according to Bloomberg analyst monitoring, ARK Fund had sold more than 2 million shares of Grayscale Bitcoin Trust (GBTC), cleared all its remaining GBTC positions, and used 100 million About half of the money in dollars bought shares of the ProShares Bitcoin Strategy ETF (BITO).

Meanwhile, co-founder @ETF_Institute, ARK Invest may Invested more than US$200 million to replace GBTC in its ARKW.

Although there is no official confirmation of the amount of inflows reported online, after all, the asset management scale of these asset management companies is not a small amount. How many will there be after the Bitcoin ETF is passed? Capital inflow is an issue worthy of attention.