Bitcoin's (BTC) price spiked above $45,000 on Monday as analysts at Bloomberg Intelligence now say there is a 95% chance that the Securities and Exchange Commission (SEC) will approve the first spot BTC exchange-traded fund (ETF) this week.
The increase in bullishness for an imminent spot BTC ETF comes as multiple applicants filed their final S-1 form amendments on Jan. 8, with many including changes to the proposed fees for their products.
Valkyrie, WisdomTree, BlackRock, Bitwise, VanEck, Invesco and Galaxy, ARK Invest and 21Shares, and Grayscale all filed new amendments.
While the applications have yet to be officially approved, a fee war has already broken out as the asset managers vie for the attention of investors. Eric Balchunas, senior ETF analyst at Bloomberg Intelligence, called the fee drop from 0.8% to 0.25% by ARk and 21Shares “breathtaking,” and said, “The fee wars are intense, but that’s another level.”
The application by Bitwise currently offers the lowest Sponsor Fee, with no fee for the first six months and the first $1 billion in assets, followed by a 0.24% fee. The ARK Invest and 21Shares application also offers no fee for the first six months or until $1 billion in assets, followed by a 0.25% fee.
The iShare ETF by BlackRock comes with a 0.20% fee for the first 12 months or until the first $5 billion, at which point the fee increases to 0.30%. The listed fee for the VanEck application is 0.25%, while Franklin Templeton offers a 0.29% fee, and Fidelity charges 0.39%.
From there, the fee rate escalates, with WisdomTree charging 0.5%, Galaxy Invesco charging 0.59% after six months of no fee, a 0.80% fee by Valkyrie, 0.90% by Hashdex, and Grayscale coming in with the highest fee, set at 1.5%.
It is still possible for these fees to change, however, as noted by Bloomberg ETF Analyst James Seyffart. “Keep in mind this isn't finalized so I would not be surprised to see them drop even further,” he tweeted.
Following the S-1 amendments, the next stage in the decision-making process will be a vote by SEC commissioners on whether to approve one or multiple applications, but there is currently nothing scheduled on the commission's public agenda before Thursday. This means the SEC could make the decision using its delegated authority policy, according to Balchunas.
“We’re not even sure they’re going to vote,” Balchunas tweeted. “They could use something called delegated authority, but we don’t know. It looks like there are three options: whether they vote or use delegated authority, which means they must approve it because when they denied the past ones, they didn’t have a vote.”
In other developments, a form filed with the SEC on Friday shows that BlackRock has already started to seed its fund, purchasing 227.9 BTC on Jan. 5 for a price of $10 million.
“On January 5, 2024, the Foundation purchased 227.90250 Bitcoins with proceeds from Seed Creation Baskets using the Prime Execution Agent,” the firm said in its S-1 registration statement. “As of the date of this prospectus, these 400,000 Shares represent all of the outstanding Shares.”
The S-1 filing by ARK and 21Shares said they plan to purchase an initial seed creation basket of $437,000 “on or about” January 8 and will use that amount to acquire Bitcoin “at or prior” to the listing of shares on the Cboe BZX Exchange.
VanEck’s filing shows that the firm purchased $72.5 million worth of Bitcoin on Friday, equating to 1,450,000 shares at a per-share price of $50.00. That “resulted in the Trust receiving 1,640.92489329 Bitcoin," the filing said. "Delivery of the Seed Creation Baskets was made on January 5, 2024."
The filing from Bitwise indicates plans to buy up to $200 million worth of Bitcoin. “Pantera Capital Management LP, through one or more of its affiliated investment funds, has indicated an interest in purchasing an aggregate of up to $200 million of Shares in this offering from Authorized Participants or in the marketplace through broker-dealers," Bitwise said.
On the Bitcoin price action front, market analysts at Barchart noted a bullish development on the weekly chart in the form of a golden cross, which occurs when an asset’s short-term moving average (MA) surpasses its long-term moving average, signaling positive market sentiment. Barchart said this is the first time in history that BTC formed a golden cross on the weekly chart.
BITCOIN MAKES HISTORY ?: For the first time in its history, $BTC forms a Golden Cross on the weekly chart pic.twitter.com/WslTG504TJ
— Barchart (@Barchart) January 8, 2024
While this pattern is generally interpreted as a positive signal that hints at the potential for a sustained upward trend, it is also understood to be a lagging indicator, which means when the cross occurs, the market has already incorporated the bullish sentiment, and the pattern confirms an existing trend rather than forecasting a new one.
With the hype surrounding the potential launch of the first spot BTC ETF building, the SEC sought to warn investors against making uninformed decisions or jumping on an investment just because it is trending on social media.
“Say ‘NO GO to FOMO’ (fear of missing out),” the SEC tweeted. “Just because others might buy a particular investment, doesn’t mean it’s the right opportunity for you.” The tweet provided a link to the additional resources section of the SEC’s website and included a longer explanation of the dangers of FOMO.
“At some point we’ve all felt FOMO. Whether it involves trying to get a reservation at the trendiest new restaurant or the hottest ticket on Broadway, everyone has experienced some kind of fear of missing out on something,” the SEC said. “While it may be hard to curb this feeling in most instances, one place you should consider using your strongest willpower is when you’re making decisions on investment opportunities. As you make investment decisions keep this phrase in mind, ‘NO GO to FOMO.’”
Despite the warnings, Bitcoin’s price is climbing higher to start the week, with bulls pushing the price action to support/resistance at $47,000 at the time of writing.
BTC/USD Chart by TradingView
