SEC Engages with Spot Bitcoin ETF Applicants
The U.S. Securities and Exchange Commission (SEC) has recently conducted meetings with applicants for spot bitcoin exchange-traded funds (ETFs). Among the participants were Blackrock, the world’s largest asset manager, as well as several other ETF applicants. The SEC’s engagement with these entities included a rare joint conference call on the topic of granting permission to sell small investors access to cryptocurrency.
Bloomberg ETF analyst, Eric Balchunas, commented that the SEC’s repeated calls to issuers and exchanges is a positive indication for the expected approval of spot bitcoin ETFs by January 10. Balchunas has maintained a 90% chance of approval by that date.
SEC’s Preference for Cash Creation Model
Although many spot bitcoin ETF issuers prefer the in-kind creation model, the SEC insists on the cash creation model. Blackrock has even revised its spot bitcoin ETF filing to conform to the cash creation approach.
Balchunas explained that the SEC’s concern about money laundering through in-kind creations in spot bitcoin ETFs is the reason they are focused on the cash creation model. The SEC wants to ensure a more closed system to prevent ETFs from being utilized for illegal activities.
Expected Approvals by January 10
Bloomberg analyst, James Seyffart, expects the SEC to approve spot bitcoin ETFs by January 10, with some issuers possibly being left behind. Seyffart anticipates that approvals will likely occur between January 8 and January 10.
Hot Take: Positive Outlook for Spot Bitcoin ETF Approvals
The U.S. Securities and Exchange Commission’s active engagement with spot bitcoin ETF applicants, including rare joint conference calls, suggests a positive outlook for the approval of these ETFs. The SEC’s preference for the cash creation model and their concerns about money laundering reflects their commitment to ensuring the integrity of the market. Analysts believe that by January 10, there is a high probability of spot bitcoin ETF approvals. This development is significant for the crypto market, as it opens up new avenues for small investors to participate and potentially drive the growth of the industry.
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