BlackRock Modifies Bitcoin ETF Application to Address SEC Concerns
As more firms compete for the first Bitcoin spot exchange-traded fund (ETF) approval in the U.S., BlackRock has made changes to its proposed Bitcoin ETF structure to align with SEC feedback. The modifications were made to address concerns around broker-dealer regulations and balance sheet risks.
New Prepaid Model Introduced
Following a meeting with the SEC’s Division of Trading and Markets, BlackRock introduced a “prepaid model” that requires an offshore platform to prepay cash to a registered broker-dealer before receiving bitcoin from Coinbase custody. This separation of entities aims to reduce financial and regulatory pressure on broker-dealers.
Pando Asset Enters the Race
Swiss asset manager Pando Asset has also entered the Bitcoin spot ETF race by filing an application with the SEC. Their proposed Pando Asset Spot Bitcoin Trust would utilize Coinbase custody and track bitcoin price movements.
Predictions for Approval
Bloomberg analyst James Seyffart predicts that the SEC could approve all spot Bitcoin ETF applications simultaneously on January 10th. This prediction comes as more firms revise their models based on SEC feedback, indicating that approval for a Bitcoin spot ETF may be inevitable.
Hot Take: The Evolution of Bitcoin ETF Proposals
The recent revisions made by BlackRock to its proposed Bitcoin ETF structure demonstrate how applicants are adapting their models to meet SEC requirements. Despite the challenges posed by broker-dealer regulations, the willingness of firms to tailor their proposals suggests that the approval of a Bitcoin spot ETF is on the horizon, although it may not align with initial expectations.
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