US Bitcoin (BTC) Spot ETF Talks at an Advanced Stage: Report

New details reveal the SEC has engaged executives from BlackRock and other firms over technical details like custody arrangements, investor disclosures, and methods to redeem and create shares. The talks, which reportedly started in September, may explain Bitcoin’s brief surge to over $44,000 earlier this week.

Bitcoin ETF Applications Moving Quickly

The meetings were attended by lawyers, staff from the SEC, and exchanges where applicants intend to list their products. The meeting for the BlackRock ETF reportedly addressed the investment firm’s redemption mechanism.

Those close to ETF discussions report that they extend beyond the SEC’s trading and markets and corporate finance divisions to members of chairman Gary Gensler’s office. The frequency of requests from the SEC has also quickened from every few months to almost weekly. Applicants have been submitting revised filings on a more regular basis.

BlackRock’s Updated S-1 Filing. Source: X (Twitter)

Earlier this year, ARK Invest, BlackRock, VanEck, and several other investment firms filed to launch ETFs that track the price of Bitcoin. The SEC’s constant refrain since the filings has been that the market manipulation could hurt investors. Applicants have answered with proposals to share market surveillance with reputable crypto exchanges.

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Cathie Wood Welcomes New ETFs

An ETF application by Cathie Wood’s ARK Invest, in partnership with 21Shares, is first in line for approval on Jan. 11, 2024. Industry players expect the SEC to approve 12 other applications if they approve ARK’s. Multiple approvals would ensure that investors get the best deal.

ARK has applied for at least five other crypto-related ETFs. In September, the firm filed an application to launch a fund that tracks Ethereum’s price directly.

Bloomberg Crypto Show. Source: YouTube

To be clear, the SEC has not committed to approving any of the crypto funds. When probed in a recent interview on Bloomberg Television, SEC Commissioner Hester Peirce remained tight-lipped on application reviews. Peirce bristled at the “pro-crypto” label but conceded there were better ways to regulate crypto than through enforcement.