On November 20, 2023, a crucial assembly was held between the US Securities and Change Fee (SEC) and representatives from BlackRock, Inc., and the Nasdaq Inventory Market LLC. The assembly’s major focus was the dialogue of the iShares Bitcoin Belief and its potential itemizing on Nasdaq as a spot Bitcoin exchange-traded fund (ETF).
The SEC’s Division of Buying and selling and Markets hosted the assembly, attended by key personnel together with David Shillman, Tom McGowan, Randall Roy, Ray Lombardo, Molly Kim, Edward Cho, Sarah Schandler, and Stacia Sowerby. Representing BlackRock had been Rachel Aguirre, Adithya Attawar, Shannon Ghia, Robert Mitchnick, Charles Park, Marisa Rolland, and Ben Tecmire. Moreover, Eun Ah Choi, Jonathan Cayne, Giang Bui, and Ali Doyle represented The NASDAQ Inventory Market LLC.
BlackRock’s presentation to the SEC included an in depth exposition of two potential fashions for the iShares Bitcoin Belief: the “In-Sort Redemption Mannequin” and the “In-Money Redemption Mannequin.” These fashions outlined the mechanics of how the ETF might function, specializing in the redemption course of involving market makers, bitcoin custodians, and numerous exchanges.
The In-Sort Redemption Mannequin entails a course of the place the ETF issuer instructs the Bitcoin Custodian to launch bitcoin to a market maker, who might then unwind the bitcoin place. This mannequin entails numerous events, together with a U.S. Registered Dealer/Vendor, spot crypto exchanges, and an inventory alternate.
The In-Money Redemption Mannequin, however, entails the ETF issuer buying and selling with the market maker to promote bitcoin for USD. This mannequin consists of extra steps involving the Bitcoin Custodian transferring money out of chilly storage and the market maker delivering shares to the Switch Agent by way of an Approved Participant.
The SEC’s response to BlackRock’s presentation and proposed fashions stays unclear, with no data on whether or not the SEC plans to approve the itemizing of a spot Bitcoin ETF. The approval of such an ETF would signify a serious milestone within the acceptance of cryptocurrency in mainstream monetary markets.
This assembly comes amid ongoing critiques by the SEC of varied proposals for spot crypto ETFs from a number of corporations, together with Constancy, WisdomTree, Invesco Galaxy, Valkyrie, VanEck, and Bitwise, alongside BlackRock. The push for a spot Bitcoin ETF has seen a number of delays and denials, creating a way of anticipation and uncertainty within the crypto and monetary markets.
The SEC has additionally met with executives from Grayscale on the identical day to debate their proposal for a Bitcoin ETF. The assembly with BlackRock and the continuing critiques point out the SEC’s lively engagement in understanding and probably integrating cryptocurrencies into regulated monetary merchandise.
BlackRock’s utility to checklist a spot Bitcoin ETF on the Nasdaq was initially filed in June 2023. The dialogue round Bitcoin ETFs has been fueled by a 2019 video of SEC Chair Gary Gensler, the place he criticized the fee’s “inconsistent” method to Bitcoin merchandise. The approval of a spot Bitcoin ETF by the SEC can be a landmark resolution, probably paving the way in which for wider acceptance and integration of cryptocurrencies within the mainstream monetary sector.
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