BlackRock and SEC In Discussions Over Bitcoin Spot ETF Structure

In a recent development, BlackRock, the world’s largest asset manager, is back in conversation with the Securities and Exchange Commission’s (SEC) Trading & Markets division. They’re hashing out the details of their proposed spot Bitcoin Exchange-Traded Fund (ETF).

Let’s unravel the latest updates with Bloomberg ETF analyst Eric Balchunas as our guide.

Picking Between In-Kind and Cash

BlackRock’s recent meet-up with the SEC brought a fascinating dilemma to light: the choice between an “in-kind” redemption model and a cash model for their cutting-edge Bitcoin ETF. Last week’s meeting hinted at the SEC leaning towards cash creation, but BlackRock prefers the unique in-kind redemption approach. Simply put, instead of exchanging Bitcoin for cash, they’d swap it for shares.

In the sequel, the focus shifted to a tweak proposed by NASDAQ Stock Market LLC for the iShares Bitcoin Trust’s shares. BlackRock showcased a revamped in-kind model for redemptions, using slides to break down the ins and outs of their preferred strategy.

Also Read: Compound Labs CEO Falsely Accused of SEC Letter On BlackRock Spot ETFs

BlackRock’s Resolve Stands Strong

However, the SEC has some reservations. They’re concerned about the impact on balance sheets and the risks to Market Maker’s broker/dealer company in the United States (MM-BD). Despite this, BlackRock is standing firm, as reported by Balchunas. In contrast, the SEC is suggesting cash creations to dodge issues tied to unregistered brokers.

Even with their differences, the ongoing talks suggest that the ETF approval might be on the horizon. If BlackRock gets the regulatory green light, it could shake up the market. Experts think it might attract a wave of institutional cash, possibly pushing Bitcoin’s value to a record $141,000 in the first year and drawing in billions of dollars.

What Lies Ahead?

As this unfolding story captivates both investors and regulators, we await the final chapter. The potential approval could mark a milestone, blending cryptocurrency into everyday financial products. The story is still evolving, but the buzz around BlackRock’s bold ETF proposal continues to resonate in financial circles.

Read More: Spot Bitcoin ETF Market Could Reach $100 Billion: Bloomberg