The path to approving the Spot Bitcoin ETF has encountered numerous obstacles, particularly under the leadership of Gary Gensler at the SEC. During this challenging period, all applicants, including BlackRock, had to omit certain elements from their ETF submissions. With the recent shift in SEC leadership, the agency has begun reviewing these applications, signaling a more favorable approach toward cryptocurrency, although a definitive verdict is still pending.
What Changes Did BlackRock Propose?
BlackRock has requested permission to reinstate in-kind transfers for the share creation and redemption processes of its iShares Bitcoin Trust. This component was previously eliminated from its filing after SEC objections last year. The firm’s new submission has been accepted for evaluation, potentially allowing transactions with Bitcoin akin to cash dealings if approved.
How Will This Impact Bitcoin Transactions?
Currently, Authorized Participants can create shares with cash or redeem shares in cash. If BlackRock’s proposal is greenlit, they will be able to conduct these activities using Bitcoin directly, thereby eliminating the need for cash conversion. BTC transfers would be facilitated through Coinbase Custody.
This proposed shift is noteworthy as it could allow for direct BTC trading, thereby enhancing liquidity within the fund. Further, the costs linked to the ETF could decline since transactions can be processed in Bitcoin.
The SEC has initiated a public comment period regarding the proposal and a decision is anticipated to be announced in the next 45 to 90 days.
– The SEC is reviewing BlackRock’s proposal for the Bitcoin ETF.
– The proposal includes reinstating in-kind transfers for Bitcoin.
– Direct BTC transactions could increase liquidity.
– Cost efficiencies are expected with Bitcoin payment options.
This development marks a pivotal moment for Bitcoin ETFs, potentially reshaping how digital currencies are traded within the financial ecosystem.
