The applicants have quickly responded to the SEC’s comments on their S-1 forms, to ready themselves for possible spot Bitcoin ETF approval.
Both VanEck and BlackRock have filed amended S-1 forms for their spot Bitcoin ETF proposals after addressing recent comments from the United States Securities and Exchange Commission (SEC). The Commission had set a Monday deadline for applicants to submit amended forms as the deadline for approval or rejection approaches.
After receiving the amended forms, the SEC added comments, which were reportedly minor notes on the expected ETFs from the applicants. According to reports, forms now filed by applicants show a few changes, including specifics on steps required if a counterparty or authorized participant becomes bankrupt, noting a possible conflict of interest. In addition, there were statements of caution directed at potential investors, notifying them of possible impaired liquidity.
S-1 Forms May Not Delay SEC Spot Bitcoin ETF Approval
While some noted that the SEC’s comments may have been an attempt at delay tactics, others disagreed. According to Fox Business producer and journalist Eleanor Terret, the SEC could delay approvals if the members of the Commission exercise their rights under 17 C.F.R. Section 201.431, which allows them to request a review and vote regardless of approval via delegated authority.
For Bloomberg ETF analyst James Seyffart, the SEC’s recent moves may not indicate a delay. Seyffart believes that the speed with which the SEC has reviewed filings and made comments suggests that the Commission is interested in approving spot Bitcoin ETFs. Van Buren Capital General Partner Scott Johnsson also agrees with Seyffart. Johnsson added that fixing the details of S-1 forms may not affect approval of 19b-4s.
Fee Structures and Waivers
Recent amendments to S-1 forms highlight fee structures. For instance, Bitwise is charging no fees for the first 6 months, or until $1 billion in assets, and then a 0.24% after. Ark/21Shares follows the same trend, but with 0.25% after the first 6 months or $1 billion in assets. For BlackRock, the fee is 0.2% for the first 12 months or $5 billion in assets, and then 0.3% after.
Last week, Galaxy and Fidelity also revealed their fee structures. While Fidelity’s fee is 0.39%, Galaxy/Invesco plans to waive the first 6 months and charge 0.59% afterward. According to Bloomberg ETF analyst Eric Balchunas, fee waivers may not mean much. In an X post, Balchunas explained that these waivers historically have not “moved (the) needle much” because investors are usually in it for the long term. Consequently, investors tend to focus more on the regular fees than fee waivers or the initial low figures.
Before would-be issuers can offer their ETFs to the public, the SEC must approve both 19b-4 and S-1 forms. In simple terms, the 19b-4 is for SEC approval, while the S-1 allows for the public sale of the products.
The SEC’s first deadline is Wednesday when it is expected to decide on the ARK/21Shares. Speculations suggest that the Commission could approve more than one ETF on the day instead of focusing solely on ARK/21Shares.