BlackRock’s revised Bitcoin spot ETF proposal aligns with SEC preferences, suggesting a shift toward regulatory compliance. The deepening debates between the SEC and ETF issuers indicate a more engaged and nuanced examination of Bitcoin ETFs. SEC Chairman Gary Gensler acknowledged the impact of court rulings on ETF decisions, hinting at a possible change in his approach.
The possible approval of a Bitcoin spot ETF (exchange-traded fund) by the United States Securities and Exchange Commission (SEC) has been a topic of intense speculation in the cryptocurrency market. Recent developments suggest that the financial system could be close to reaching this important milestone.
Here are three indicators that point toward a possible green light from the SEC for a spot Bitcoin ETF.
ETF: BlackRock’s Revised Proposal Conforms to SEC Preferences
BlackRock recently updated its application for a spot Bitcoin ETF, notably allowing cash redemptions. This strategic shift appears to align closely with the SEC’s preferences, potentially increasing the chances of approval.
“The Trust issues and redeems baskets on an ongoing basis. These transactions will take place in exchange for cash. Subject to in-kind regulatory approval, these transactions may also take place in exchange for Bitcoin,” BlackRock said.
The SEC has set January 15 as the deadline for a decision on BlackRock’s application for a Bitcoin ETF. But the final verdict is expected on March 15. This move by BlackRock could set a precedent for future ETF filings, showing its willingness to adapt to regulatory expectations.
ETF: Deepening Debates Indicates SEC’s Commitment
Bloomberg Intelligence research analyst James Seyffart also reported that four different issuers have held discussions with the SEC about their Bitcoin ETF proposals. BlackRock recently held its third meeting with the SEC, while Grayscale, Franklin and Fidelity held their own meetings.
A federal appeals court ruling favorable to Grayscale’s ETF application appears to have forced the SEC to reconsider its stance. This could limit the SEC’s ability to reject new applications based on previously held arguments, subsequently hinting at a more open approach toward cryptocurrency-based financial products.
ETF: SEC Chairman Recognizes Impact of Court Rulings
Recent comments from SEC Chairman Gary Gensler reveal that the agency is processing multiple Bitcoin ETF applications, between eight and twelve. Gensler highlighted the influence of recent court rulings on the SEC’s decision-making process.
“We had denied several of these requests in the past, but the District of Columbia courts ruled on the matter. So, we are re-examining the issue based on those court rulings,” Gensler said.
This recognition indicates a possible change in the SEC’s approach, possibly making it more inclined to approve these requests. Recognition of legal precedents and ongoing examination of many applications suggest that the SEC is taking a more measured and potentially favorable view toward Bitcoin ETFs.
In conclusion, the combination of BlackRock’s accommodation proposal, increased engagement between the SEC and ETF issuers, and the SEC Chairman’s recognition of the impact of legal rulings collectively point toward a greater likelihood that the SEC approves a Bitcoin spot ETF.
This approval would be a milestone for the cryptocurrency market and would signal the growing integration of digital assets into conventional financial systems.
The SEC currently has 12 pending bitcoin spot ETF applications, including offerings from Grayscale and BlackRock. Most have a final decision date in March, apart from ARK Invest’s offer, which the SEC must approve or deny by January 10, 2024.
By Audy Castaneda
