BlackRock takes another big step toward the Bitcoin ETF

BlackRock is on the right track in the race for a Bitcoin Spot ETF. The asset manager wants to address the SEC's concerns.

The goal is in sight. As Bloomberg analyst James Seyffahrt reports, BlackRock, the world's largest asset manager, is making final adjustments to its Bitcoin ETF application. BlackRock likely prefers a cash variant for its ETF. BlackRock is responding to concerns from the Securities and Exchange Commission (SEC). The U.S. authority previously raised concerns about the lack of investor protection and possible market manipulation.

The cash variant provides for the following: When new ETF shares are created, the affected parties must hold cash reserves and transfer them to the issuer. The issuer then transfers the shares to the affected parties. This option has been under discussion for some time. In the meantime, there were concerns that the ETF would be backed only by cash and not, as previously believed, by Bitcoin. However, this is not the case.

According to Bloomberg analyst Eric Balchunas, the ETF would initially be created with cash reserves and then converted to Bitcoin. The exchange of ETF shares would work the same way. BlackRock's application states, "No shares will be issued until the Bitcoin custodian or prime execution agent has allocated the appropriate number of Bitcoin to the trust."

BlackRock wants clarification before Christmas break

BlackRock continues to move forward with its Bitcoin ETF. Apparently, the asset manager wants to clear up the issue before the Christmas vacations. In general, the crypto industry has been waiting months, if not years, for the approval of a Bitcoin Spot ETF. The SEC has long resisted. But the increasing number of applications and growing investor interest finally forced the authority to act. Market observers expect the authorization to be granted in early January 2024.