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Spot Bitcoin ETF Applicants Meet With The SEC To Guarantee Cash Conditions

December 22, 2023 - Around 2 mins mins to read

Key Points:

  • The SEC meets with spot Bitcoin ETF applicants, urging modifications to redemption models.

  • Dispute over redemption models unfolds as BlackRock advocates “in-kind” and SEC pushes for “cash creates.”

  • With an SEC decision expected by January 10, the outcome could reshape the cryptocurrency landscape.

The U.S. Securities and Exchange Commission (SEC) has reportedly engaged in targeted conference calls with all spot Bitcoin ETF applicants.

Spot Bitcoin ETF Applicants Meet With The SEC To Guarantee Cash Conditions

Read more: Spot Bitcoin ETF Approval May Happen After January 8

SEC Takes Unprecedented Steps For Spot Bitcoin ETF Applicants

According to Fox Business Network’s Senior Correspondent, Charles Gasparino, this regulatory action is considered “rare.” The primary focus of these discussions revolves around persuading spot Bitcoin ETF applicants, including industry giants like BlackRock, to modify their proposed Bitcoin ETF redemption models.

The redemption model has been a contentious issue between spot Bitcoin ETF applicants and regulators, with BlackRock advocating for “in-kind” redemptions while the SEC is pushing for “cash creates” redemptions.

Fox Business reporter Eleanor Terrett revealed that sources have disclosed the SEC’s efforts to hold joint conference calls, emphasizing the need for physically-backed Bitcoin ETFs to be cash-settled. Additionally, the SEC requires applicants to eliminate any references to physical redemption in their filings.

The SEC is expected to make decisions on multiple ETF filings by January 10, with a particular focus on the Prime Execution Agent model becoming a central point of discussion. Notably, industry leaders like BlackRock may need to revise their filings to align with the SEC’s evolving guidelines. This regulatory move reflects the SEC’s shift towards a more interactive and cautious approach to cryptocurrencies.

Investors are closely watching these developments, as a positive outcome could pave the way for Wall Street giants such as BlackRock, Fidelity, and Franklin Templeton to offer ETFs directly invested in Bitcoin. Analysts anticipate that such approval could usher in billions of institutional capital into the cryptocurrency space, leading to a potentially favorable impact on Bitcoin prices.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

 

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Author

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.