The SEC Engages in Productive Discussions with Bitcoin ETF Applicants
The Securities and Exchange Commission (SEC) has been engaging in fruitful discussions with applicants for spot Bitcoin ETFs. Both Grayscale, a crypto asset manager, and BlackRock, a Wall Street titan, have confirmed meetings with the SEC to discuss their respective Bitcoin ETF applications. While the details of these meetings are not disclosed, amendments made to the applications provide some insight into the regulator’s stance.
SEC Carefully Weighs Applications Instead of Outright Rejection
In contrast to previous rejections citing concerns of market manipulation, the recent amendments suggest that the SEC is carefully considering the applications. BlackRock, for instance, filed an amendment that includes specific mentions of Fedwire and SWIFT network outages as potential risks. The filing also clarifies that if the Bitcoin ETF is dissolved, investors will receive cash instead of BTC.
Enhanced Investor Protection Measures
BlackRock’s amendment includes additional provisions to protect investors. The application now requires market makers to perform due diligence to ensure funds are not derived from unlawful activities. The filing also addresses concerns about reliable intraday price information by specifying that investors can use the CME CF Bitcoin Real Time Index.
Bitwise Makes Changes to its Application
Bitwise also made changes to its Bitcoin ETF application, including renaming it from “Bitwise Bitcoin ETP Trust” to “Bitwise Bitcoin ETF.” The updated application highlights the risks associated with investing in a trust that purchases Bitcoin.
Investor Interest in Crypto ETPs Continues to Grow
Despite uncertainty surrounding spot Bitcoin ETFs, investors are pouring money into crypto exchange-traded products (ETPs). Last week alone, $176 million was invested in crypto ETPs, bringing the three-month total to nearly $2 billion. However, there are still no guarantees of a spot Bitcoin ETF in the near future.
Hot Take: SEC Shows a More Open Attitude Towards Bitcoin ETFs
The recent discussions between the SEC and Bitcoin ETF applicants indicate a shift in the regulator’s approach. Instead of outright rejections, the SEC appears to be carefully considering the applications, taking into account investor protection measures and potential risks. This more open attitude reflects the growing interest in crypto ETPs and suggests that a spot Bitcoin ETF may become a reality sooner than expected.
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