20 December 2023
According to Charles Gasparino of Fox Business, financial firms feel confident that the Securities and Exchange Commission (SEC) is going to rule in favor of approving spot Bitcoin Exchange-Traded Funds (ETFs) after January 8, 2024.
Gasparino’s post also stated that shares the of Bitcoin ETFs will only be available to purchase with cash, rather than also with bitcoin. As the regulator is “worried about ETF’s being used as a vehicle for money laundering.” Over the course of the past few weeks, spot Bitcoin ETF issuers like BlackRock have been meeting with the SEC to discuss the final details of their ETFs. There was one topic in particular that the regulator was meeting with issuers about, and that was in-kind vs in-cash creations for shares of the ETFs.
Bloomberg senior ETF analyst Eric Balchunas commented on the news, saying, “SEC worried about money laundering via in-kind creations in a spot bitcoin ETF, this is why they so dug in on cash creates only (which is a much more closed system).”
Earlier this week, BlackRock and other ETF issuers complied with the SEC and filed their ETFs to be in-cash for creations. To be clear, the ETFs will hold spot bitcoin, but the process of purchasing shares of the ETF will be in cash, meaning investors will give their cash to their preferred ETF issuer who will then go and purchase the spot bitcoin to hold in the ETF.
“BlackRock has gone cash only. That’s basically a wrap. Debate over. In-kind will have to wait,” Balchunas said on Monday.
Should the SEC approve these proposed Bitcoin ETFs, it would mark a significant milestone in legitimizing and integrating Bitcoin into traditional investment portfolios. The move would also signal a shift in regulatory sentiment toward greater acceptance and regulation of Bitcoin.
While no official statements have been released by the SEC regarding the purported discussions, Gasparino’s post has sparked interest and optimism within the financial industry, with stakeholders eagerly anticipating a potential approval around January 8.