Bitcoin Spot ETFs topic catch steam after FOMC, BlackRock says minutes were a 'green light for investors'
|- Invesco has bent the knee to the SEC’s demands for cash creates after BlackRock tried to resist
- BitWise Bitcoin ETF has been added to DTCC website under the BITB ticker symbol
- BlackRock has modified the structure of its spot Bitcoin ETF to allow Wall Street banks exposure to Bitcoin even without a license to own
Bitcoin Spot exchange-traded funds (ETFs) have become a hot topic on X once again, this time not resulting from bold assertions from ETF specialists with Bloomberg Intelligence James Seyffart and Eric Balchunas. It comes after Federal Reserve chair Jerome Powell delivered his speech at the Federal Open Market Committee (FOMC) meeting during the afternoon hours of the New York session.
Also Read: Bitcoin price shoots to $42,800 as FOMC keeps interest rates unchanged
Bitcoin Spot ETFs making headlines
Spot BTC ETFs are trending on X with a series of developments hinting at an imminent approval. To begin with, Invesco has capitulated to the US Securities and Exchange Commission’s (SEC) push for ETFs to do cash creates as opposed to in-kinds. The reports come after the institution submitted its updated S-1, showing that it has committed strictly to what the SEC advocated for.
Invesco is committing to cash creates only, as per their just-updated S-1. Pretty big clue that SEC is dug in on only letting cash create ETFs out in first run (which is what we hearing back channel as well). Still, many were waiting to see if BlackRock could sway SEC on in-kind https://t.co/l4DIu9G2Wh
— Eric Balchunas (@EricBalchunas) December 13, 2023
Invesco is committing to cash creates only, as per their just-updated S-1. Pretty big clue that SEC is dug in on only letting cash create ETFs out in first run (which is what we hearing back channel as well). Still, many were waiting to see if BlackRock could sway SEC on in-kind https://t.co/l4DIu9G2Wh
— Eric Balchunas (@EricBalchunas) December 13, 2023
Reportedly, the financial regulator could be inclined to allow only cash creates for the first run after approval before the ETFs can eventually do in-kinds. Notably, BlackRock, Fidelity Investments, and Ark Invest had demonstrated resistance to this proposal.
Elsewhere, the BitWise Bitcoin ETF has been added to the Depository Trust and Clearing Corporation (DTCC) website under the BITB ticker symbol. This is a significant move as the institutional player takes another step towards a possible product launch if the SEC approves.
BitWise BITB
Also, BlackRock is reported to have modified the structure of its spot Bitcoin ETF to allow ‘authorized participants’ to create new shares in the fund with cash.
These ‘authorized participants are ideally the Wall Street banks like Goldman Sachs and JPMorgan. The modification, if approved, gives them exposure to Bitcoin even without a license to directly own cryptocurrency. Nevertheless, the model is structured to enhance investor protection while at the same time reducing transaction costs, actions that are the SEC deems vital in its requirements for approval.
BlackRock calls FOMC minutes ‘green light for investors’
The developments have become a hot topic on crypto X, with BlackRock’s systemic multi-strategy fund portfolio manager, Jeffrey Rosenberg, attributing it to the FOMC minutes where Fed chair Powell signaled more rate cuts than he did previously. Specifically, the markets reacted to the one-year interest rate outlook falling from 5.1% to 4.6%.
Rosenberg, says the Fed “is very happy with what they’ve seen,” and “you can’t really fight this until there is some kind of fundamental data from the economy side that pushes back.”
Crypto ETF FAQs
What is an ETF?
An Exchange-Traded Fund (ETF) is an investment vehicle or an index that tracks the price of an underlying asset. ETFs can not only track a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks Bitcoin’s price. ETF is a tool used by investors to gain exposure to a certain asset.
Is Bitcoin futures ETF approved?
Yes. The first Bitcoin futures ETF in the US was approved by the US Securities & Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still waiting for the regulator’s permission. The SEC says that the cryptocurrency industry is new and subject to manipulation, which is why it has been delaying crypto-related futures ETFs for the last few years.
Is Bitcoin spot ETF approved?
Bitcoin spot ETF has been approved outside the US, but the SEC is yet to approve one in the country. After BlackRock filed for a Bitcoin spot ETF on June 15, the interest surrounding crypto ETFs has been renewed. Grayscale – whose application for a Bitcoin spot ETF was initially rejected by the SEC – got a victory in court, forcing the US regulator to review its proposal again. The SEC’s loss in this lawsuit has fueled hopes that a Bitcoin spot ETF might be approved by the end of the year.
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