EXCLUSIVE: Progress Reported in Spot Bitcoin ETF Talks with SEC!

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• Discussions between the SEC and asset managers hoping to list spot Bitcoin exchange-traded funds (ETFs) have progressed, delving into key technical details.
• Thirteen companies have applied to the U.S. Securities and Exchange Commission (SEC) for ETFs tracking Bitcoin’s price.
• Advocates argue that a regulated product tied to the spot price of cryptocurrency provides the best way for investors to invest in Bitcoin.

Significant progress has been made in spot Bitcoin ETF negotiations between the US Securities and Exchange Commission and asset managers.

Discussions Progressed Between SEC and Asset Managers

Discussions between the U.S. Securities and Exchange Commission (SEC) and asset managers hoping to list spot Bitcoin exchange-traded funds (ETFs) have progressed, delving into key technical details. This is considered a sign that the agency may approve the products soon.

Thirteen companies, including Grayscale Investments, BlackRock, Invesco, and ARK Investments, have applied to the U.S. Securities and Exchange Commission (SEC) for ETFs tracking Bitcoin’s price.

Advocates argue that a regulated product tied to the spot price of cryptocurrency provides the best way for investors to invest in Bitcoin. However, the agency has long rejected such products, citing that they fail to meet the standards it has set for investor protections.

However, in August, a court ruled that the SEC’s rejection of Grayscale’s application to convert its Bitcoin fund into an ETF was wrong. Since then, the SEC has engaged with issuers on some crucial details typically debated towards the end of an ETF application process.

Among these details are custody arrangements, creation and redemption mechanisms, and investor risk disclosures. The discussions suggest that a Bitcoin ETF, providing tightly regulated market access to the world’s largest cryptocurrency for previously hesitant investors, could be a turning point for the industry. Demand is expected to soar up to $3 billion in the first few days.

SEC Still Concerned About Some Issues

However, the SEC remains concerned about the manipulability of Bitcoin. Previous discussions have focused on this concern, often for educational purposes. According to memos and sources, some recent discussions have been conducted with staff in Chairman Gary Gensler’s office.

Alongside advanced discussions, the pace of information requests from the SEC has increased, occurring weekly or every few months. As discussions progress, issuers must update their applications to reflect new details. For example, this week, BlackRock amended its application to provide more insights into the measures it plans to take to protect investors.