US SEC Engages in Ongoing Discussions Over Spot Bitcoin ETF Proposals
Summary:
The US Securities and Exchange Commission (SEC) has been in repeated discussions with asset management firms, including BlackRock, Fidelity, and Grayscale, about the potential creation of a spot Bitcoin exchange-traded fund (ETF). These discussions intend to address concerns over market manipulation and investor safeguards. A spot Bitcoin ETF, which represents the real-time market value of Bitcoin directly, is hoped to broaden the cryptocurrency's reach by being listed on major Wall Street trading platforms. A decision from the SEC on the matter is postponed till early January.
The US Securities and Exchange Commission (SEC) continues to confer with prospective asset managers looking to establish a spot Bitcoin (BTC) exchange-traded fund (ETF) on American soil, including dialogue involving officials from the office of Gary Gensler. Legal records reveal that the regulating body interacted with BlackRock representatives on December 14 with regard to the prospective rule alteration that would allow the trading of the cryptocurrency-based product on major exchanges. Bloomberg's ETF analyst, Jayme Seyffart, shares that this marks the third BlackRock-SEC exchange scrutinizing the submission. Conversations between the SEC and asset managers have become more frequent in the recent weeks, with Grayscale and Franklin Templeton also discussing their applications with regulators on December 8, merely one day post the Fidelity representative’s SEC presentation. BlackRock convened with the SEC a second time recently, this time in the company of Gensler's staff.
Late in November, representatives from Gensler’s office also interacted with the Hashdex team to address worries regarding market manipulation and the safeguarding of investors. Specifically, they dissected the process of cash creations and redemptions, along with procuring spot Bitcoin from physical exchanges within the Chicago Mercantile Exchange (CME) market, as discovered by Cointelegraph. Numerous notable asset management firms including WisdomTree, BlackRock, Invesco, Fidelity, and Grayscale have plans to initiate spot Bitcoin ETFs. The SEC has repeatedly rejected similar propositions over time. Currently, it is stalling its upcoming verdicts until early January, which is when the majority of the latest submissions will reach their expiry dates. If approved, Bitcoin, the preeminent cryptocurrency, will be listed on substantial Wall Street exchanges, thereby increasing Bitcoin's reach amongst investors, with backing provided by globally dominant investment firms. If rejected, it is probable that the asset managers will contest the decision, leading to a further delay in proceedings. A spot Bitcoin ETF is a direct representation of the real-time market value of Bitcoin, owning physical Bitcoin with the value indicating the current worth of the Bitcoin in its possession. In contrast, a futures Bitcoin ETF invests in Bitcoin futures contracts, essentially, agreements pertaining to the future cost of Bitcoin, as opposed to owning the cryptocurrency. The first futures Bitcoin ETF received SEC approval in 2021.
Published At
12/15/2023 9:35:00 PM
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