This is the third version of this headline I’ve published in this newsletter. And the answer may finally be yes: A spotbitcoin exchangetraded fund (ETF) may begin trading in the U.S. in the coming weeks.
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The narrative
Excitement over a spot bitcoin ETF – a regulated financial product that would give institutional and retail investors easier exposure to bitcoin’s price without requiring them to invest directly in the asset – continues to grow.
Why it matters
The U.S. Securities and Exchange Commission (SEC) faces a Jan. 10 deadline for approving an application from Ark 21 Shares. It’s widely seen as the final date by which the SEC may approve or reject the more than a dozen outstanding applications.
Breaking it down
A number of signs point to an approval in the near future – like continued meetings between SEC staff, exchanges and would-be issuers, as well as a flurry of filings.
SEC staff met with representatives from the markets that want to list the products – the New York Stock Exchange, Nasdaq and Cboe Global Markets – on Wednesday afternoon, an individual told CoinDesk.
Fox Business first reported that the meetings were taking place, saying SEC attorneys from the Division of Trading and Markets met with representatives from the exchanges.
Over the past few weeks, SEC staff have also met with issuers to address various aspects of their S-1 filings, including having all issuers use a cash creation and redemption model instead of in-kind.
Cash creation means what it sounds like: Authorized participants will purchase shares of the ETFs from the issuers using cash, rather than directly acquiring the underlying asset.
Companies like BlackRock and Grayscale have argued before the SEC that the regulator should be comfortable with and allow in-kind creation. Georgetown University Associate Professor James Angel similarly argued in a letter to the regulator that only allowing cash creation would end up adding fees and other frictions to the various parties.
An individual familiar with an issuer’s efforts told CoinDesk last month that issuers had been meeting with the SEC to pitch the regulator on allowing both cash and in-kind…
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