BlackRock Bitcoin ETF Gains Traction in SEC Talks

Blackrock, the world’s largest asset manager, has intensified discussions with the U.S. Securities and Exchange Commission (SEC) regarding its spot bitcoin exchange-traded fund (ETF) application. This marks the fourth meeting between Blackrock and the SEC, with SEC Chairman Gary Gensler signaling a renewed focus on spot bitcoin ETF filings.

In a meeting memorandum dated Dec. 14 and filed with the SEC, three representatives from Blackrock engaged with the Office of the Chair. The discussion centered on the proposed rule change by the Nasdaq Stock Market LLC to list and trade shares of the Ishares Bitcoin Trust under Nasdaq Rule 5711(d). If approved, Blackrock’s spot bitcoin ETF is set to trade under the ticker IBTC.

Furthermore, Bloomberg’s senior ETF analyst, Eric Balchunas, shed light on the meeting, highlighting the presence of public policy experts, including Blackrock’s Public Policy Director Ben Tecmire, formerly a senior counsel at the SEC.

James Seyffart, another Bloomberg analyst, emphasized that Blackrock is not alone in its discussions with the SEC. Hashdex, another company seeking approval for a spot in the Bitcoin ETF, held a similar meeting in November. Before the recent session, Blackrock met with the SEC on Nov. 20, Nov. 28, and Dec. 11 to address concerns related to its spot bitcoin ETF filing.

Nice find here: Gensler's staff met with BlackRock yesterday to talk $IBTC but it wasn't normal crew, more public policy folks incl BlackRock's Public Policy Director Ben Tecmire who btw used to be senior counsel at the SEC's Division of Inv Mgmt https://t.co/bMePGpOufK

— Eric Balchunas (@EricBalchunas) December 15, 2023

SEC Reviews Bitcoin ETFs: Creation Method Debates

The SEC has actively engaged with various companies filing for spot bitcoin ETFs, including Fidelity, Franklin Templeton, and Grayscale Investments. One key point of discussion has been the creation method—whether to use cash or the in-kind method. While the SEC appears inclined toward the cash creation method, Blackrock, Fidelity, and others have preferred the in-kind method. Blackrock even proposed a revised in-kind method to address the SEC’s concerns.

SEC Chairman Gary Gensler, in response to court rulings in the Grayscale case, stated that the SEC is “taking a new look” at spot bitcoin ETF filings. He emphasized the SEC’s commitment to acting within its authorities and aligning with court interpretations. Currently, 13 spot bitcoin ETF applications are pending at the SEC, and Bloomberg analysts predict a 90% chance of SEC approval by Jan. 10.

Related Reading | Bitcoin Evolution: Grayscale’s ETF Quest Sparks Market Surge