Bitcoin ETF Deadline Looms: It's 'All Systems Go', Say Analysts

Today is the day the U.S. Securities and Exchange Commission (SEC) will approve (or reject or delay) at least one of the 11 pending spot Bitcoin ETF applications—per its own deadline.

"Most likely is we see formal approvals ballpark 4-6pm today with the Derby starting on Thursday," said Bloomberg Intelligence analyst Eric Balchunas, predicting that if funds are approved today they could be available as soon as when markets open on Thursday, January 11.

He's one of the ETF analysts who's been closely following what he's dubbed the "Cointucky Derby."

The crypto industry has been eagerly waiting for the SEC to approve a spot Bitcoin ETF in the U.S. for 10 years. (They have been trading for years elsewhere in the world.) Such a product would allow traders to gain exposure to Bitcoin without having to actually buy or custody BTC themselves.

Potential issuers BlackRock, Fidelity, WisdomTree, and Grayscale are all still in the running, having filed multiple amendments to their S-1 registrations since the start of the week to satisfy comments from the SEC. The amendments have provided new details about authorized participants and fees.

In another round of last-minute amendments, BlackRock and ARK Invest dropped the fees on their funds again. BlackRock will now charge an 0.25% fee on its fund and an 0.12% introductory fee on the first $5 billion worth of assets under management for 12 months.

Meanwhile, ARK 21Shares has dropped its fee to 0.21%. The company said it will stick to its plan to waive its ETF fees completely until the fund accrues $1 billion worth of assets or for the first six months—whichever happens first.

SEC rules allow the securities regulator to delay its decisions by up to 240 days after an application has been received. For the ARK 21Shares Bitcoin ETF, the SEC has run out of the extra days to delay a decision—it can only approve or deny the application now.

This is all happening in the shadow of a market moving fake-out yesterday. The SEC Twitter account was compromised and used to send an "unauthorized" message saying that all Bitcoin ETFs had been approved.

About 15 minutes later, SEC Chair Gary Gensler took to his personal Twitter account to warn that the message was fake. But the damage had already been done: The market plunged and Bitcoin sank below $45,ooo earlier this morning. It has since rebounded slightly and is now trading at $45,153.03, or 3% below its price yesterday, according to CoinGecko.

Now, U.S. lawmakers have written a letter to chair Gensler to "request clarity" on the incident.

In the past 24 hours, almost $96 million worth of Bitcoin options were liquidated. The split on long (optimistic) and short (pessimistic) traders is telling: About $60 million of the liquidations were on long contracts, which are used to bet the Bitcoin price will rise. The rest were on