Let’s talk about the crypto industry’s obsession: I think there is a 98% probability that a bitcoin ETF spot will be approved by the U.S. on Jan. 10.

Recent developments confirm this. Even during the holiday season, the Securities and Exchange Commission met with potential ETF issuers in order to clarify the last details, organize the creation and redemption procedures, and guide the issuers on how to incorporate the most recent changes into their revised S-1 files. BlackRock has just submitted its fourth amendment with the SEC and expects to seed its bitcoin-based ETF with $10m on January 3.

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Seeding the ETF shell is not a launch.

Fox Business reports that all final amendments must be made to spot bitcoin ETF application by December 29. “The applications which are fully furnished and submitted by Friday will be taken into consideration in the first round.”

Here is the SEC timeline for 13 potential issuers.

Source: Bloomberg HTML0

SEC requested that issuers make their authorized participant agreements – which describe who will be playing the key role in creating and redeeming ETFs shares – readily available within the next few days. Authorized participants are a central part of the ETF business, but this job will be a particularly tough one, with bitcoin ETF APs needing basic knowledge of digital assets and the ability to provide safekeeping and custody, conduct due diligence for anti-money-laundering and know-your-customer purposes, ensure compliance with sanctions regulations, deal and place crypto asset orders on behalf of clients, and so on. Few traditional brokerages have the expertise to handle this.

No participants authorized yet. Source: Bloomberg

The SEC clearly wanted ETF issuers at least to conduct a preliminary chat with market participants, and work out the details – for example. Before formally granting greenlight, the SEC wanted to know the roles assigned, the operation flow, and the AP agreements. It takes the entire digital asset ecosystem to work together and collaborate in order for a new, groundbreaking ETF such as this one to be successful. Wall Street is fortunate to have Coinbase. They’ve already white-labeled a large portion of their crypto users database and wallet addresses from 2013.

Hong Kong’s Securities & Futures Commission, on the other, is moving forward with spot bitcoin ETFs, but in a logical, conventional manner. The SFC first issued virtual asset management licences to fund managers who have crypto experience. These licenses allowed them to launch private funds that were only for long-term investments. The SFC also issued a license for a virtual currency exchange on crypto trading platforms that allows retail clients to purchase or sell bitcoins and ether.

They then offered traditional brokerage firms that had a background in crypto to expand their business to include virtual assets, meaning these brokers could also offer crypto-related trading and place orders on behalf of clients. This sequence of licensing sets the rules for a bitcoin ETF in 2024.

According to Coinbase Institutional, Bitcoin’s strength will be supported by topics such as spot ETFs and the halving of real rates. Three factors combined will set the fundamentals for 2024, and push the market capitalization of bitcoin and the entire crypto industry to new heights.