“The Block” cites sources reporting that the U.S. Securities and Exchange Commission (SEC) has resolved the remaining issues regarding a Bitcoin spot ETF in its communication with the applicants. These issues include the choice of creation/redemption mechanism, designated authorized participants, and Bitcoin fork concerns.
Grayscale agrees to adopt a cash creation/redemption mechanism for the ETF. The SEC has consistently insisted on a cash mode, while some applicants, like Grayscale, preferred a physical mode, attempting to convert their Bitcoin trust fund, GBTC, into a Bitcoin spot ETF.
Furthermore, applicants have started designating authorized participants, who play a crucial role in the creation and redemption process of exchange-traded funds (ETFs) and serve as liquidity providers. For example, BlackRock has designated Jane Street Capital and JP Morgan Securities LLC, while Valkyrie has designated Jane Street Capital and Cantor Fitzgerald.
In terms of Bitcoin fork issues, the applicants have reportedly reached an agreement with the SEC to abandon any fork networks different from the Bitcoin main chain, such as Bitcoin Cash (BCH). Grayscale also explicitly stated in its updated proposal on October 26 that if the ETF is approved by the SEC, it will not receive any tokens through fork networks or airdrops.
Lastly, the SEC has met with the New York Stock Exchange and Nasdaq this week to discuss relevant pending documents. Although these meetings have not provided a definitive signal on whether the ETF will be approved, they represent significant progress.