BlackRock and Fidelity in Talks with SEC for Potential Bitcoin ETF Approval

BlackRock Inc has recently discussed with Security and Exchange Commission (SEC) representatives on Monday on their Bitcoin spot ETF fillings according to memo records filed with the agency.

Grayscale Investments and Franklin Templeton have also met with the Securities and Exchange Commission in the past week.

Trading and Markets divisions, alongside Corporate Finance, have engaged in discussions, as indicated by memos. These departments are the requisite branches for ETF approval. Bitwise Asset Management, ARK Invest, and Valkyrie have also been in contact with the SEC.

Matt Hougan, chief investment officer of Bitwise, said in an interview with etf.com that discussions with the agency are “narrowing down and getting to specifics.

Expectations are increasing for the potential approval of a spot bitcoin fund that would monitor physically backed bitcoin. Although the SEC permits cryptocurrency ETFs exposing investors to futures contracts, spot crypto ETFs have been rejected due to concerns about potential market manipulation and safeguarding investor protection.

Spot Bitcoin ETF Details

The SEC and the firms are ironing out the details of a spot bitcoin ETF structure as the Jan. 10 deadline on a decision on ARK's application approaches. The memos have pointed to discussions about redemption models to fund the exchange-traded fund. While many issuers are pushing for an in-kind redemption model, which is what most stock ETFs use, the SEC may prefer cash.

On Nov. 28, BlackRock presented its revised in-kind redemption model to the agency.

"During our 11/20 meeting with Trading & Markets staff, we understood the SEC has certain unresolved questions around the in-kind model relating to balance sheet impacts and risks,” BlackRock wrote.

“The in-kind creation and redemption model is a beautiful model of efficiency, from a cost perspective, from a tracking perspective and from a tax perspective,” Hougan told etf.com. “It is better, from that perspective than a cash create model, but if all we can get as a cash grade model, then that'll be great, as well.,"

Source yahoo finance

What's next for Bitcoin?

All signs suggested that the Bitcoin ETF approval is near, with some anticipating major players like BlackRock and Fidelity to be approved by 5th to 10th January 2024. Though this is not confirmed but if it turns out to be approved then Billions of dollars will be poised into Bitcoin and other cryptocurrencies causing price to rise to the moon.

Michael Saylor founder of Micro strategy even predicted that price of Bitcoin could reach $500,000 by the end of the bull run.