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Amid Bitcoin ETF Race, Wall Street Giants Dot Their Bureaucratic I's as Likely SEC Action Looms

BlackRock, Fidelity and Invesco want all their ducks in a row should the SEC grant approvals early in the new year.

The race to launch a bitcoin ETF reached a bureaucratic crescendo Friday as some of the biggest Wall Street firms finalized their offerings' paperwork ahead of widely expected – possibly imminent – approval from the U.S. Securities and Exchange Commission.

BlackRock, Fidelity and Invesco, as well as crypto-focused firms Valkyrie and Bitwise, revealed key details, including partnerships with vital trading firms and the fees their prospective ETFs will charge customers if the SEC gives the green light.

The fun could start in a matter of days. ETF watchers expect the SEC to drop its years-long stonewalling of a spot bitcoin ETF in early 2024. Over a dozen firms are hoping to break into the new market by selling their own version of the easily investable product to investors who'd rather keep their bitcoin exposure in their conventional brokerage accounts alongside stocks and bonds.

Friday's filing rush suggests the firms aren't willing to take any chances on timing. Bloomberg analysts have said the SEC is likely to approve multiple issuers at once to avoid picking favorites. Thus, the eager issuers are getting all the ducks in a row so that they can be in the first group.

BlackRock set off the end-of-week filing frenzy by declaring JPMorgan and Jane Street its authorized participants – a key role in the ETF business, a job that involves ensuring ETF prices stay closely linked to the value of their underlying assets.Within hours, other filings followed.

With little to differentiate one bitcoin ETF from the next, the fight could come down to fees. Invesco and its partner Galaxy Digital disclosed they'll waive fees for the first six months and $5 billion invested, according to Bloomberg ETF analyst Eric Balchunas. That undercut Fidelity, which plans to charge 39 basis points.

But size also matters. Bitwise revealed it's already lined up $200 million in seed capital for its ETF, edging out BlackRock, which has $10 million at the ready. Investors could also choose one fund over the next simply because of its popularity out of the gate.

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