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Who Will Launch First Bitcoin Spot ETF? BlackRock, VanEck, or Grayscale?
Many of the biggest names in traditional finance made headlines in the cryptocurrency sector over the summer when they announced that they were applying for spot Bitcoin ETFs. Companies such as BlackRock, Fidelity, Citi Group, ARK, and VanEck are all linked to prospective spot Bitcoin ETFs.
If approved, they would be the first spot Bitcoin ETFs, meaning that they directly track the current price of BTC, rather than prices of futures contracts. The latter is the only type of Bitcoin ETF that the SEC has approved for digital assets over the past decade.
However, in lieu of Grayscale’s legal victory against the SEC, there is a ton of renewed optimism and expectation that a spot Bitcoin ETF will be approved sooner than later. We’ll be discussing some of the most likely companies to get their ETFs approved.
ETF Approval Possibilities Pushing BTC Price?
There seems to be a fair amount of consensus among market experts that a spot Bitcoin ETF will be approved within the next few months. Not only that, but there are also varying estimates in the hundreds of billions of dollars regarding how much new investment money will flow into Bitcoin if and when these ETFs are approved. Bitcoin’s price is responding to such rumors, with its price jumping over $30k USD for the first time since June. It will be interesting to see just how the price action shapes up over the next few months and if and when an ETF approval announcement is made.
Google Trends data has “spot bitcoin ETF” as a Google search value for a five-year window being on track to hit the peak value of 100. This indicates maximum interest among the general population in the search.
Top 5 Potential Bitcoin Spot ETFs
Below we’ve noted five potential Bitcoin Spot ETFs that are likely to be approved in the coming months. They’re not in any particular order, but we’ll discuss their filings and company holdings when it comes to BTC.
BlackRock
BlackRock first announced Bitcoin on their balance sheet in fall of 2022, which was a surprising announcement considering their CEOs previous stance on BTC. More recently, in their filings with the SEC for their spot Bitcoin ETF, the company announced that they had purchased another 1,000 BTC, and there is possibly more than that in the company’s holdings.
BlackRock has chosen Coinbase as their Bitcoin custodian in their ETF filings. As the world’s largest asset manager, it seems a good bet that their ETF will be approved.
Grayscale
Grayscale Bitcoin Trust is the biggest holder of Bitcoin in the world that is a company, and they’re one of the largest holders of crypto overall. Grayscale holds over 600k BTC along with over 3 million ETH, which makes them one of the world’s largest crypto holders. They’re looking to convert their Bitcoin Trust (GBTC) to an exchange-traded product. The company plans to list the ETF on NYSE Arca. Similarly, they’re looking to convert their Ethereum Trust (ETHE) into the first spot Ethereum ETF.
Following their legal victories against the SEC, it seems likely the Grayscale Bitcoin Trust will be converted into a spot ETF at some point.
Valkyrie Investments
Valkyrie Investments filed its first spot Bitcoin ETF application in January 2021 but was rejected by the SEC like many others. Much like many of the other former rejected applicants for a spot Bitcoin ETF, Valkyrie refiled its application on June 21. The ETF would refer to the Chicago Mercantile Exchange’s (CME) price for Bitcoin and trade on NYSE Arca, with Xapo as the crypto custodian.
Valkyrie has been investing in Bitcoin for some time. Valkyrie actually launched the second BTC futures ETF in the US: the Valkyrie Bitcoin Strategy ETF (BTF), in October 2021. It also launched Valkyrie Balance Sheet Opportunities (VBB) in December 2021 before it liquidated VBB in October 2022. Valkyrie also runs the Valkyrie Bitcoin Miners ETF (WGMI), an ETF that tracks securities of companies that derive their revenue/profits from BTC mining operations.
ARK Invest
ARK Investment Management amended and re-filed for their spot Bitcoin ETF following BlackRock’s filing in June. Their amendments included a surveillance sharing agreement with the CME futures markets and likely Coinbase exchange as custodian.
Cathie Wood and European asset manager 21Shares had previously applied for approval for a spot Bitcoin ETF in April, along with applications in 2021 and 2022 that were rejected. If approved this time, it will launch on the Chicago Board Options Exchange (CBOE) BZX Exchange under the ticker symbol ARKB.
Fidelity Investments
Fidelity as a company already holds Bitcoin because of their Fidelity Advantage Bitcoin ETF, which invests directly in Bitcoin, with the security of Fidelity’s in-house storage services. As of October 20, 2023, the fund holds 1965.9547 BTC. Of course, the more successful the ETF, the more BTC it will hold. This ETF is traded on the Toronto Stock Exchange, while Fidelity is applying for a separate Bitcoin spot ETF for the US market. Their US spot Bitcoin ETF would see Fidelity Service Company serving as the administrator, with Fidelity Digital Assets acting as the BTC custodian.
Closing Thoughts
Though there is a ton of excitement about these approvals, it’s important to remember that investing in an ETF isn’t the same as actually purchasing Bitcoin. All you get is the price exposure to crypto through an ETF. This means that you’re not able to ever use your Bitcoin itself for something like a purchase or as a collateral when taking out a loan. That said, it will only be a positive thing for the sector if and when the first one is approved.
