The U.S. Securities and Exchange Commission (SEC) is actively discussing the potential approval of spot Bitcoin exchange-traded funds (ETFs) with major asset management firms such as Grayscale and BlackRock. Despite ongoing talks, no spot Bitcoin ETFs have received approval, leaving the cryptocurrency market eagerly awaiting the SEC’s decision.
Grayscale and SEC: Strategic Meetings
Grayscale Investments, a leading digital currency asset manager, has been actively engaged in discussions with the SEC. The regulatory body disclosed a series of strategic meetings, including one on November 29, 2023, with Grayscale representatives, including CEO Michael Sonnenshein. These discussions, initiated in 2022, primarily revolved around a proposed rule change allowing the NYSE Arca to list and trade shares of the Grayscale Bitcoin Trust (GBTC). Grayscale aims to transform GBTC into a spot Bitcoin ETF, pending regulatory approval. The SEC also held talks with Coinbase, Grayscale’s custody partner, demonstrating a comprehensive due diligence process.
BlackRock, the world’s largest asset manager, has similarly been actively pursuing the launch of a spot Bitcoin ETF. Discussions with the SEC, held on November 28 and November 20, focused on key considerations, such as in-kind versus cash redemption models. These models play a crucial role in determining transactional processes for ETF participants, whether involving cryptocurrency or cash.
Diverse Interactions and Broad Review Process
In addition to Grayscale and BlackRock, the SEC expanded its consultations to include other major asset managers like Hashdex, Bitwise, VanEck, Fidelity, Invesco, and 21Shares (representing Ark Invest). These discussions, occurring mainly in late November 2023, highlight the SEC’s comprehensive approach to evaluating different aspects of proposed spot Bitcoin ETFs.
However, notable exclusions from reported engagements with firms like WisdomTree, Valkyrie, or GlobalX suggest a selective yet focused review process by the SEC.
SEC’s Unclear Stance Amid Active Engagements
Despite the flurry of meetings, the SEC has not provided a clear indication of its intent to approve a spot Bitcoin ETF. This sustained non-committal stance has left market participants and observers in a state of anticipation.
While the SEC’s active involvement in consultations underscores its interest in the cryptocurrency space, it does not necessarily imply imminent approvals. The agency’s meticulous approach in engaging with various stakeholders reflects its commitment to a thorough assessment of the implications and structures of spot Bitcoin ETFs. This cautious approach aligns with the complex and evolving nature of the cryptocurrency market.
