Bitwise and BlackRock, two asset managers planning to offer a bitcoin exchange-traded fund (ETF), have filed updated documents with securities regulators.
Bitwise filed an amendment to its S-1 registration form with the U.S. Securities and Exchange Commission (SEC) on December 4. BlackRock filed an amendment to its own S-1 form for its own ETF, the iShares Bitcoin Trust, the same day. .
At least ten asset managers plan to offer a spot Bitcoin ETF. Bloomberg ETF analyst Eric Balchunas suggested that other updated S-1 filings will likely appear in the coming week. He added that these documents will address issues raised in recent discussions between the SEC and ETF filers.
Balchunas believes there is a 90% chance that the SEC will approve one or more potential spot Bitcoin ETFs by January 10, 2024. While the SEC has approved Bitcoin and Ethereum futures ETFs, it has not yet approved any spot Bitcoin ETF. such an ETF currently exists in the US.
Cash creations versus in-kind creations
Balchunas also drew attention to the methods of ETF creation, writing:
“What everyone is concerned about is whether SEC will allow in-kind creations. Rumor has it that only cash will be allowed in the first grouping. Many issuers [are] ready for both (if BlackRock wins [the] SEC, many will also do it in kind. If not, they will pay cash to get out).”
Cash creations would allow some ETF participants to trade in cash, while in-kind creations would allow these participants to trade with Bitcoin. Balchunas previously suggested that the distinction is a problem because current regulations can make it difficult for brokers to trade Bitcoin.
BlackRock’s latest meeting specifically addressed cash and in-kind models, as evidenced by an attached presentation. As such, the company’s latest update may include changes that address these discussions.
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