The U.S. Securities and Exchange Commission (SEC) met with BlackRock and Grayscale on the 20th to discuss the application for a Bitcoin spot ETF. It is worth noting that while BlackRock has yielded to the SEC’s insistence and adopted the cash redemption model, Grayscale still tried to convince the SEC to accept the physical redemption model during the meeting.
(Prior information:
BlackRock yielded to the SEC and adopted the “cash redemption” model, updating the Bitcoin spot ETF code IBIT.)
(Background information:
Bitcoin spot ETF approval date》Galaxy Digital predicts: SEC approval by January 10, 2024, due to Grayscale lawsuit clearance.)
Table of Contents:
SEC meets with BlackRock and Grayscale again
Grayscale does not give up on pursuing the physical redemption model
Bloomberg analyst: SEC insists on cash redemption due to money laundering concerns
The U.S. 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 re-examine the conversion of its Bitcoin trust fund GBTC into a Bitcoin spot ETF, as well as applications from BlackRock, Fidelity, and other asset management giants.
Currently, including two Bloomberg senior ETF analysts and Galaxy Digital founder Mike Novogratz, it is predicted that the SEC will approve the first Bitcoin spot ETF by January 10th next year. Recently, there have been increasing signs that the SEC is likely to approve it.
According to the latest memorandum released by the SEC, on the 19th local time, the SEC met with BlackRock and Grayscale again to discuss the application for a Bitcoin spot ETF. This is the 5th meeting with BlackRock and the 4th meeting with Grayscale. This makes a total of 25 meetings between the SEC and issuers regarding spot ETFs.
Bloomberg ETF analyst Eric Balchunas wrote on the X platform today (21st), “It is worth noting that, unlike BlackRock and Ark/21 Shares, which modified the documents this week and yielded to the SEC’s insistence on the cash purchase/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 purchases and redemptions, and the physical model has higher efficiency in purchases and redemptions, which is more beneficial to investors. Therefore, Grayscale believes that a spot ETF that provides physical and cash redemptions will serve the best interests of investors.
To alleviate the SEC’s concerns, Grayscale also proposed that only Authorized Participants (AP) be allowed to purchase and redeem Bitcoin ETF shares, and these APs must be registered with the Financial Industry Regulatory Authority (FINRA) in the United States and be self-settling broker-dealers.
Seyffart also stated that he fully supports Grayscale, BlackRock, and all other issuers who have promoted or are promoting the physical model, as it is a simpler and more efficient way to operate ETFs.
Further reading:
Contrary to the SEC》Grayscale requests GBTC to adopt “physical redemption” and approves all Bitcoin spot ETFs
However, Eric Balchunas also mentioned the SEC’s consideration of insisting on the cash model for Bitcoin spot ETFs:
Seyffart also pointed out yesterday that they have not changed their prediction that the probability of the SEC approving spot ETFs before January 10th is as high as 90%. They are still paying attention to the window from January 8th to 10th.
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Tags:
SEC
Physical redemption
Bitcoin spot ETF
Grayscale
United States
BlackRock