The U.S. Securities and Exchange Commission (SEC) is now in the advanced stages of discussion with several asset managers over the launch of bitcoin exchange-traded funds (ETFs). Industry insiders report that these conversations have honed in on critical operational specifics, signaling a potential green light for the much-anticipated products.
Among the hopefuls, Grayscale Investments, BlackRock, Invesco, and ARK Investments stand out, with active applications pending for ETFs tracking bitcoin’s market price. This development follows a pivotal court decision in August, which found the SEC’s previous rejection of Grayscale’s ETF conversion bid to be flawed.
Related: BlackRock Launches Ethereum ETF
Key issues under negotiation include the custody of assets, the mechanisms for creating and redeeming shares, and clear risk disclosures for investors. These are typically the final hurdles before an ETF can be approved, suggesting that an official announcement may be imminent.
The introduction of a bitcoin ETF would be a landmark event, potentially unlocking up to $3 billion in initial demand from investors seeking a regulated pathway to the world’s leading cryptocurrency.
ARK’s CEO, Cathie Wood, optimistically noted a shift in the SEC’s stance, hinting at a rise in the probability of multiple ETF approvals. This sentiment echoes the industry’s readiness for a diversified bitcoin ETF offering, providing investors the opportunity to make informed comparisons.
While firms like BlackRock have remained reticent, a Grayscale spokesperson acknowledged their ongoing, constructive engagement with the SEC. The regulator’s increased pace of information requests suggests a proactive approach to the finalization of these discussions. As a result, firms have been updating their filings to reflect the latest deliberations, with BlackRock recently amending its application to enhance investor safeguards.
