The United States Securities and Exchange Commission (SEC) has entered into a fresh round of discussions with asset management firms regarding the potential approval of a spot Bitcoin exchange-traded fund (ETF) in the U.S.
These discussions included officials from the office of SEC Chair Gary Gensler, signifying a notable development in the regulatory landscape for cryptocurrency investments.
According to official court filings, on December 14th, the SEC held a meeting with representatives from BlackRock to deliberate over the proposed rule change that would permit the trading of a crypto investment vehicle on major U.S. exchanges.
This marks the third meeting between BlackRock and the SEC, underlining the growing interest and anticipation surrounding this potential approval. ETF analyst Jayme Seyffart from Bloomberg highlighted the significance of these discussions.
In recent weeks, meetings between asset managers and the SEC have intensified. On December 8th, Grayscale and Franklin Templeton also engaged in discussions with regulators regarding their respective ETF applications. Fidelity had a similar meeting a day earlier.
The most recent meeting on December 14th between BlackRock and the SEC, which involved Gensler’s office, underscores the high stakes involved.
In late November, Chair Gensler’s staff met with representatives from Hashdex to address concerns related to market manipulation and investor protection.
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Key topics of discussion included the use of cash creations and redemptions, as well as the acquisition of spot Bitcoin from physical exchanges within the Chicago Mercantile Exchange market.
Several prominent asset managers, including WisdomTree, BlackRock, Invesco, Fidelity, and Grayscale, are actively working towards launching spot Bitcoin ETFs.
Historically, the SEC has denied similar proposals, but it now appears to be deferring its next decisions until early January, coinciding with the expiration of most applicants’ latest deadlines.
If approved, a spot Bitcoin ETF would enable Bitcoin to be traded on major Wall Street exchanges, making it accessible to a wider audience of investors backed by some of the world’s most influential investment firms.
Conversely, if denied, investment managers are likely to appeal the decision, further prolonging the wait.
It’s important to note the distinction between spot Bitcoin ETFs and futures Bitcoin ETFs.
The former directly tracks the real-time market price of Bitcoin, holding actual Bitcoin, while the latter invests in Bitcoin futures contracts, which are agreements based on the future price of Bitcoin.
The SEC approved the first futures Bitcoin ETF in 2021, and now the focus has shifted to spot Bitcoin ETFs as the industry eagerly awaits regulatory clarity.
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