Bitwise and BlackRock, two prominent asset managers, have recently submitted updated filings to the U.S. Securities and Exchange Commission (SEC) for their respective spot Bitcoin exchange-traded funds (ETFs). These filings come as a result of discussions between the SEC and ETF applicants, and they may address concerns raised during these talks.
Increased Interest in Bitcoin ETFs
Currently, at least ten asset managers have expressed their intention to offer spot Bitcoin ETFs. This growing interest in cryptocurrency-related investment products reflects the increasing popularity of Bitcoin among mainstream investors. The market is eagerly awaiting the SEC’s decision on these ETF applications.
Bloomberg ETF analyst Eric Balchunas believes that there is a 90% likelihood that the SEC will approve one or more spot Bitcoin ETFs by January 10, 2024. While the SEC has previously approved Bitcoin and Ethereum futures ETFs, it has yet to approve any spot Bitcoin ETFs. The potential approval of such ETFs would mark a significant milestone for the cryptocurrency industry.
The Debate on Creation Methods
One of the key points of discussion is whether the SEC will allow in-kind creations for spot Bitcoin ETFs. Rumor has it that only cash creations will be permitted initially, which poses challenges for brokers who may find it difficult to transact in Bitcoin. However, if BlackRock manages to win over the SEC, other issuers may also adopt in-kind creations. This distinction between cash and in-kind transactions is crucial for the operational framework of these potential ETFs.
BlackRock’s most recent amendment to its S-1 filing suggests a particular focus on cash and in-kind models. The attached presentation in the filing indicates that the company is addressing this issue and may have made changes in response to the discussions with the SEC. The outcome of these changes could have a substantial impact on the structure and operations of BlackRock’s Bitcoin ETF.
Bitwise and BlackRock’s updated filings for their Bitcoin ETFs reflect ongoing discussions between the SEC and ETF applicants. The potential approval of spot Bitcoin ETFs would provide mainstream investors with a regulated and accessible way to gain exposure to the digital asset. As the industry awaits the SEC’s decision, the outcome of these discussions and amendments will shape the future of Bitcoin ETFs in the United States.
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