The U.S. Securities and Exchange Commission (SEC) met again with BlackRock and Grayscale on the 20th to discuss the application for a Bitcoin spot ETF. It is worth noting that while BlackRock has succumbed to the SEC’s insistence and adopted a cash redemption model, Grayscale still attempted to persuade the SEC to accept a physical redemption model during the meeting.
(Previous summary: BlackRock succumbs to SEC, adopts “cash redemption,” updates Bitcoin spot ETF code IBIT)
(Background: Galaxy Digital predicts the approval date for a Bitcoin spot ETF: before January 10, 2024, as Grayscale’s lawsuit is dismissed)
Table of Contents:
SEC meets again with BlackRock and Grayscale for negotiations
Grayscale has not given up on pursuing a 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 over 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 senior Bloomberg ETF analysts and Mike Novogratz, founder of cryptocurrency financial services giant Galaxy Digital, both predict that the SEC will approve the first Bitcoin spot ETF before January 10 next year, and there are increasingly signs that the SEC is likely to greenlight it.
According to the latest memorandum released by the SEC, the SEC met again on the 19th with BlackRock and Grayscale to negotiate the application for a Bitcoin spot ETF, marking the 5th meeting with BlackRock and the 4th meeting with Grayscale. This brings the total number of meetings between the SEC and issuers to 25.
Bloomberg ETF analyst Eric Balchunas wrote on X platform today (21st): It is worth noting that, unlike BlackRock and Ark/21 Shares, who modified their documents this week and succumbed to the SEC’s insistence on the cash purchase/redemption model in order to increase their chances of receiving 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 Bitcoin spot ETFs to offer both physical and cash purchase/redemption, and the physical model is more efficient for purchase/redemption and more beneficial to investors. Therefore, Grayscale believes that a spot ETF that provides physical and cash redemption will best serve the interests of investors.
To alleviate SEC concerns, Grayscale also proposed that only authorized participants (APs) be allowed to purchase and redeem shares of the Bitcoin ETF, and these APs must be registered with the Financial Industry Regulatory Authority (FINRA) and be self-clearing broker-dealers.
Seyffart stated that he fully supports Grayscale, BlackRock, and all other issuers who have advocated or are currently promoting the physical model, as it is a simpler and more efficient way to operate ETFs.
Further reading:
Contradicting the SEC: Grayscale requests “physical redemption” for GBTC, should approve all Bitcoin spot ETFs at the same time
However, Eric Balchunas also mentioned the SEC’s consideration in insisting on the cash model for Bitcoin spot ETFs.
Seyffart also stated yesterday that they have not changed their prediction that the probability of the SEC approving a spot ETF before January 10 is as high as 90%. They are still paying attention to the window from January 8th to 10th.
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Related Reports:
Bitcoin spot ETF given the green light? SEC Chairman Gary Gensler: Will consider the “successful outcome” of the Grayscale case and re-evaluate applications
Bitcoin spot ETF front line: SEC releases details of discussions with BlackRock and Grayscale: physical redemption, cash redemption…
Wall Street giant VanEck predicts “Bitcoin to reach a new all-time high within a year”! All BTC spot ETF applications will be approved together
Bitcoin spot ETF expert: BlackRock’s revised “physical redemption model” may meet SEC requirements
Tags:
SEC
Physical redemption
Bitcoin spot ETF
Grayscale
United States
BlackRock