U.S. Exchanges File 11 Revised Spot Bitcoin Fund Proposals

U.S. securities exchanges submitted revisions to 11 proposed rule changes for spot bitcoin exchange-traded products on January 5, 2024, moving a long-running regulatory contest into a more operational phase without resolving it. The filings covered proposals associated with BlackRock, Fidelity, Grayscale and other asset managers seeking to place shares backed by bitcoin on national securities exchanges.

The development mattered because an issuer could not launch merely by preparing a registration statement. The Securities and Exchange Commission also had to approve the exchange’s proposed listing rule under Section 19(b) of the Securities Exchange Act. January 5 produced revised filings on that exchange-side track while the applicants’ registration statements remained subject to separate SEC review.

Eleven proposals move together

Contemporaneous reporting counted revisions to 11 rule filings. Nasdaq submitted amendments for the iShares Bitcoin Trust and Valkyrie Bitcoin Fund. NYSE Arca submitted revisions associated with Grayscale Bitcoin Trust, Bitwise Bitcoin ETF and Hashdex Bitcoin ETF. Cboe BZX’s January 5 records covered ARK 21Shares Bitcoin ETF, Invesco Galaxy Bitcoin ETF, VanEck Bitcoin Trust, WisdomTree Bitcoin Fund, Fidelity Wise Origin Bitcoin Fund and Franklin Bitcoin ETF.

The synchronized submissions were notable. The applicants had different sponsors, fees, service providers and proposed trading venues, but the exchanges were addressing related questions about how spot-bitcoin shares could be created, redeemed, priced, custodied and monitored. That convergence indicated an active regulatory process; it was not evidence that the SEC had decided the applications.

Cash replaces bitcoin at the broker interface

The revised iShares filing stated that authorized participants—the broker-dealers permitted to create or redeem large blocks of shares—would deliver and receive cash only. They would not handle bitcoin as part of that process. The trust, working through designated service providers, would arrange the bitcoin transactions required to support creations and redemptions.

Cboe’s revised ARK 21Shares proposal described the same broad cash model, including creation and redemption transactions conducted in blocks of 5,000 shares at net asset value. This detail mattered institutionally because it separated registered broker-dealers from the direct transfer of bitcoin. It also meant the trusts and their execution arrangements, rather than authorized participants, would bear more responsibility for converting between cash and bitcoin.

That structure did not eliminate execution risk. Differences between the time cash orders were accepted, net asset value was calculated and bitcoin was purchased or sold could affect costs and tracking. The filings described mechanisms intended to manage those processes, but no trading history existed on January 5, 2024 with which to test them.

Progress was not approval

Grayscale’s SEC-filed communication called its NYSE Arca amendment another step toward converting GBTC into a spot bitcoin ETF and expressly conditioned operation as an ETF on receiving regulatory approvals. Reuters reported on January 5 that exchanges and issuers were discussing final wording with SEC staff and that revisions to 11 exchange filings had arrived late in the session. Its account relied partly on unnamed participants because the discussions were confidential.

The verified conclusion available on January 5 was therefore narrow: three national securities exchanges had materially refreshed a coordinated group of spot-bitcoin listing proposals. The amendments reduced procedural uncertainty and exposed more of the intended market plumbing, but the SEC still retained authority to approve or reject the rule changes, and registration statements still had to become effective.

Later context

On January 10, 2024, the SEC approved the exchange rule changes for 11 spot-bitcoin products in a combined order. That subsequent decision confirms the importance of the January 5 amendments but was not knowable as an outcome when the revisions were filed.