Eric Balchunas, a senior ETF analyst at Bloomberg, said in an interview that many ETF applicants have updated their registration documents with cash creation and redemption models. As of December 22, seven applicants' applications were fixed as cash creation, while the registration statements of the other seven applicants included both cash creation and physical modes. Most existing ETFs involve physical creation, which means that when intermediaries want to issue new ETF shares, they will provide funds to companies such as BlackRock using actual assets such as Bitcoin. This is how 90% of ETFs work with physical assets, while only 10% use cash.

BarnBridge failed to register its structured crypto product with the SEC, regulators alleged.

A bitcoin ETF may be approved or rejected in the first few days of the new year.

On December 23rd, ETF analyst Eric Balchunas from Bloomberg posted on social media that the latest snapshot of his ETF Cointucky Derby added a "AP Protocol" column because the SEC hopes that AP (Authorized Participants, i.e. underwriters) information can be confirmed in the next S-1 update (within the next 10 days). This step is not easy and may prevent some issuers from obtaining approval. But "confirming the AP protocol" along with "cash creation" may be equal to "getting approval".

Blackstone Group and Nasdaq met with the Trading and Markets division of the U.S. Securities and Exchange Commission (SEC) on Tuesday to discuss the asset management company's application to launch a physically-backed bitcoin ETF. The meeting included Robert Mitchnick, head of Blackstone Digital Assets, and members of the asset management company's ETF team. Joseph Cusick, Vice President and Chief Regulatory Officer of Nasdaq, Giang Bui, Head of U.S. Equities and Tradable Products, and Alison Doyle, Head of ETP Listings, also attended the meeting. This meeting is one of a series of meetings between Blackstone Group and the SEC regarding the bitcoin ETF application. Analysts believe that at least one physically-backed bitcoin ETF will receive SEC approval by 2024.

It would seem unlikely that the SEC would reject the Bitcoin Spot ETF applicants on January 10, 2024, after several discussions with those applicants and adjusting their S-1 filings. By Q1 2024, we expect Bitcoin to attempt to break above the 50,000 level. The expectations for a potential Bitcoin Spot ETF approval will likely hit the market between January 8 and January 10, 2024, making the January 12 options expiry attractive from a tactical perspective. Traders appear to price in that Bitcoin prices could swing by +/- 11% until then. Below, we discuss potential trades into the SEC Bitcoin Spot approval period.

Bloomberg analyst James Seyffart recently discussed a noteworthy development in his blog. The U.S. Securities and Exchange Commission (SEC) has changed its stance on Ethereum. Seyffart stated that with the approval of Ethereum futures ETFs, the SEC is subtly acknowledging that Ethereum may be considered a commodity rather than a security. If the SEC changes its stance and classifies Ethereum as a security, it would have a significant impact.

After the US Securities and Exchange Commission (SEC) rejected Coinbase's petition for clear cryptocurrency regulation on Friday, US Representatives Patrick McHenry and Tom Emmer criticized the SEC and its chairman Gary Gensler. Congressman McHenry commented on social media platform X that it is shameful that SEC Chairman Gary Gensler continues to refuse clarity for the digital asset ecosystem. If "the law is clear" supports his position, why does the SEC continue to fail in court? McHenry has been pushing for clear cryptocurrency regulation and will retire from Congress in January next year.<br>Another US Congressman, Tom Emmer, a Republican from Minnesota, also strongly criticized the SEC's rejection of Coinbase's petition. Emmer said that the policy of the US Securities and Exchange Commission is not to provide more transparency to the market, but to create chaos and undermine our great capital markets. This is wrong and clearly violates the SEC's responsibilities.

The SEC rejected Coinbase's petition for crypto rulemaking, marking yet another refusal to provide regulatory clarity for an industry that badly wants it.

Coinbase has officially raised legal questions against the Securities and Exchange Commission (SEC) for rejecting its petition for rulemaking starting in 2022. Coinbase's Chief Legal Officer, Paul Grewal, stated on X that "we have now filed with the Third Circuit to challenge the SEC's arbitrary and capricious denial of our petition to establish a crypto rule. We thank the court for its consideration once again." Grewal called this decision "arbitrary and capricious." Coinbase argued in its petition review that the SEC's rejection was "an abuse of discretion, contrary to law, and in violation of the Administrative Procedure Act."