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Representatives from both BlackRock institutional firm and Nasdaq have looked to the United States Securities and Exchange Commission (SEC) to consider the proposal of allowing a spot Bitcoin exchange-traded fund (ETF).
In a recent memo from Edward Cho, Office of Market Supervision, Division of Trading and Markets within the SEC, BlackRock laid out how it would be using a model for its Bitcoin trust. The trust, called the iShares Bitcoin Trust, would have an in-kind or in-cash rewards approach. The SEC have no responded to either of the models. James Seyffart, an asset manager and crypto adovate pointed out the news on X:
Looks like @BlackRock also met with SEC! There’s a couple slides in relation to in-kind vs cash creation. Based on this it looks like BlackRock prefers in-kind for their #bitcoin ETF (makes sense as its probably cleanest structure for them & end investors)
h/t @btcNLNico https://t.co/AK0XspL4zJ pic.twitter.com/eeuUT9T5mn— James Seyffart (@JSeyff) November 22, 2023
Several analysts believe the SEC are close to making a decision about a spot Bitcoin ETF. While other countries have approved a spot Bitcoin ETF, including Canada, Germany, Jersey, Brazil, Liechtenstein, Guernsey, Australia, and the Cayman Islands, the US market still faces an absense of the asset. An approval of a Bitcoin spot ETF would mark a massive boost in the adoption of cryptocurrency into traditional markets.
It remains to be seen whether the commission will approve a Bitcoin spot ETF. Over the past years, the SEC has rejected and delayed applications from several leading institutional financial firms, including Valkyrie, VanEck, Bitwise and Fidelity. BlackRock was the first company that applied for a spot ETF on the Nasdaq exchange.
What exactly is a Bitcoin spot ETF?
A Bitcoin Spot ETF is a financial product that allows investors to gain exposure to the price movements of Bitcoin without actually buying or owning the cryptocurrency. Unlike traditional ETFs that track the performance of stocks or other assets, a Bitcoin Spot ETF specifically follows the price of Bitcoin in the spot market.
Investors can buy and sell shares of the ETF on stock exchanges like any other security, providing a convenient and regulated way to invest in Bitcoin. The ETF typically holds Bitcoin as part of its underlying assets, allowing investors to indirectly own a portion of the cryptocurrency without the need for a digital wallet or direct ownership of Bitcoin.