The application for this round of Bitcoin spot ETF has a high probability of being successfully approved. The main reasons are the extremely high success rate of BlackRock ETF applications and the addition of the Monitoring Sharing Agreement SSA.

• BlackRock ETF application success rate

BlackRock is famous for issuing index-tracking fund products. Its flagship fund product (iShares) accounts for nearly 50% of the U.S. ETF market. BlackRock has a long history of success in obtaining ETF approvals. According to statistics, the success rate of its ETF applications is nearly 100%, with the number of approvals being 575/576. The only failure was an actively managed ETF filed by BlackRock and Precidian Investments, which the SEC cited as a lack of transparency in earnings as the reason for rejection.

• Monitoring Sharing Agreement SSA

This time, the ETF application documents of 8 institutions have added the reasons why the Bitcoin spot ETF has been rejected many times earlier. Mentioned Surveillance Sharing Agreement (SSA).

SSA, full name Surveillance-Sharing Agreement, is an agreement between cryptocurrency exchanges and market regulators. The agreement allows both parties to share transaction data and information to monitor transactions. If suspicious trading data or information appears, this information will be pushed to regulators, ETF issuers and exchanges at the same time.

SSAs are often used in situations involving financial products such as ETFs. It can increase the effectiveness of financial market surveillance and help regulators detect market manipulation, fraud and other inappropriate trading practices.

The inclusion of SSA in this round of application documents will have a high probability of making the SEC less relaxed in preventing fraud and manipulative transactions. At least this time the SEC cannot give the same reasons for rejection as in 2021.

Which ETFs can be successfully approved?

Judging from the application dates, these eight institutions, except Ark Invest, all chose to apply to the SEC at almost the same time. It’s hard not to wonder if they’ve gotten some word that the SEC might approve the issuance of a Bitcoin spot ETF this year. Of course, we cannot verify whether such news actually exists. But the attitude conveyed is undoubtedly positive.

At the same time, because the dates of responses are all very close, it is likely that multiple ETFs will be approved or delayed at the same time. The proposed rule change documents for these ETFs are quite similar and include surveillance sharing agreements (SSAs). So there is no reason why the SEC would reject one and approve the other. In other words, if BlackRock’s Bitcoin spot ETF is approved, there is a high probability that ETF applications submitted by other institutions will be approved together.

Approval time prediction

Judging from the previous approval status of Bitcoin spot ETF, the probability of this ETF being successfully approved within the first and second response time Very small. The SEC will basically choose to delay the application for a Bitcoin spot ETF for 240 days before making a decision to reject it. Although the SEC cannot use the same reason to reject the spot ETF application this time, due to its consistent attitude towards the crypto market, it is likely to search for other reasons to delay the application response. Finally put off making a decision until closer to the final reply date.

On the other hand, the selection of Bitcoin custodians in ETFs may also be a key point affecting the SEC’s resolution. For a Bitcoin spot ETF, the Bitcoin custodian needs to have sufficient influence and experience in the crypto field, and must also be recognized by the SEC (can become a trading supervisor to supervise trading). For example, BlackRock made it clear in its ETF application documents that it would use Coinbase as a Bitcoin custodian. Coinbase’s previous litigation with the SEC may affect the final decision on the application to a certain extent. While the lawsuit has nothing to do with Bitcoin per se, it could delay the filing.

Therefore, we predict that the most likely time for successful approval of this round of Bitcoin spot ETFs will occur 240 days after the publication of the Federal Register 19b-4 announcement, which is the final reply date .

According to the publication time of the rule change document for each ETF application in the Federal Register, the possible approval times for the eight institutional ETFs are as follows: