The US Securities and Exchange Commission (SEC) met again with BlackRock and Grayscale on the 20th to negotiate the application for a Bitcoin spot ETF. It is worth noting that, unlike BlackRock, which succumbed to the SEC’s insistence and adopted a cash redemption model, Grayscale is still trying to persuade the SEC to accept a physical redemption model during the meeting.
Summary:
BlackRock succumbs to SEC and adopts “cash redemption,” updates Bitcoin spot ETF code IBIT.
Background:
Bitcoin spot ETF approval date: Galaxy Digital predicts it will be approved by the SEC before January 10, 2024, due to Grayscale’s lawsuit being dismissed.
Table of Contents:
SEC meets again with BlackRock and Grayscale for negotiations.
Grayscale does not give up on pursuing the physical redemption model.
Bloomberg analyst: SEC insists on cash redemption due to money laundering concerns.
The US Securities and Exchange Commission (SEC) is currently reviewing more than 10 applications for Bitcoin spot ETFs, including Grayscale, which won a lawsuit against the SEC, forcing the SEC to reevaluate the conversion of its Bitcoin Trust Fund GBTC into a Bitcoin spot ETF application, as well as applications from BlackRock, Fidelity, and other asset management giants.
Currently, including two senior Bloomberg ETF analysts and Galaxy Digital founder Mike Novogratz, it is predicted that the SEC will approve the first Bitcoin spot ETF before January 10th next year, and there are increasing signs that the SEC may soon approve it.
According to the latest memorandum released by the SEC, the SEC met again with BlackRock and Grayscale on the 19th to negotiate the application for a Bitcoin spot ETF. This was the 5th meeting with BlackRock and the 4th meeting with Grayscale, making it the 25th meeting between the SEC and the issuers regarding the spot ETF.
Bloomberg ETF analyst Eric Balchunas wrote on the X platform today (21st) that it is worth noting that unlike BlackRock and Ark/21 Shares, which modified their documents this week and succumbed to the SEC’s insistence on the cash subscription/redemption model in order to increase the likelihood of priority approval, Grayscale has not given up on persuading the SEC to accept the physical model during the meeting.
Bloomberg ETF analyst James Seyffart tweeted today that Grayscale called for the Bitcoin spot ETF to provide both physical and cash subscriptions and redemptions during the meeting, and the physical model has higher efficiency in terms of subscriptions and redemptions, which is more beneficial to investors. Therefore, Grayscale believes that a spot ETF that provides both physical and cash redemptions will serve investors’ best interests.
To alleviate the SEC’s concerns, Grayscale also proposed that only Authorized Participants (AP) be allowed to subscribe and redeem Bitcoin ETF shares, and these APs must be registered with the Financial Industry Regulatory Authority (FINRA) in the United States and be broker-dealers capable of self-settlement.
Seyffart also stated that he fully supports Grayscale, BlackRock, and all other issuers who have promoted or are currently promoting the physical model because it is a simpler and more efficient way to operate an ETF.
Further reading:
Contradicting the SEC: Grayscale requests “physical redemption” for GBTC, all Bitcoin spot ETFs should be approved at the same time.
However, Eric Balchunas also mentioned the SEC’s consideration in insisting on a cash model for Bitcoin spot ETFs:
Yesterday, Seyffart pointed out that they have not changed their prediction that the probability of the SEC approving a spot ETF before January 10th is as high as 90%. They are still paying attention to the window from January 8th to January 10th.
Related Reports:
Will Bitcoin Spot ETF be approved? SEC Chairman Gary Gensler: Will reconsider applications based on “Grayscale case” victory.
Bitcoin Spot ETF Frontline: SEC publishes details of discussions with BlackRock, Grayscale: Physical redemption, cash redemption…
Wall Street giant VanEck predicts “Bitcoin to hit a new all-time high within a year”! All BTC spot ETF applications will be approved together.
Bitcoin Spot ETF Expert: BlackRock’s revision of the “physical redemption model” may meet SEC requirements.
Tags:
SEC
Physical redemption
Bitcoin spot ETF
Grayscale
United States
BlackRock