BlackRock’s recent app update indicates their engagement with the SEC led by Gary Gensler on Dec. 11, marking the third meeting in a series held over the past few weeks.
BlackRock Inc (NYSE: BLK) has implemented structural modifications in its application to launch a spot Bitcoin ETF in the US. The updated filing allows Wall Street banks to generate new shares in the fund using fiat currencies, expanding beyond cryptocurrencies. To participate, banks must acquire authorized participant (AP) status.
This adjustment is notable as regulated US banks, unable to hold Bitcoin directly, could now act as APs for BlackRock’s ETF. Major institutions like JPMorgan or Goldman Sachs, possessing substantial balance sheets, could potentially serve as APs, although their interest remains uncertain.
In this process, the cash utilized by APs can be converted into bitcoin through an intermediary and stored by the ETF’s custody provider. This information stems from a memo filing related to a November 28 meeting involving the US Securities and Exchange Commission, BlackRock, and Nasdaq.
There is increasing optimism that the SEC may approve spot bitcoin ETFs, potentially attracting significant retail investor capital. While the conventional perspective assumed APs would be prominent crypto market-making firms like Jane Street, Jump Trading, and Virtu, the recent change opens the possibility for banks to participate, broadening the pool of liquidity providers. Speaking on the development, CF Benchmarks CEO Sui Chung said:
“If the SEC accepts this revised, dual model of create and redeem with cash and physical, that means the liquidity that supports the ETF shares when they trade would be increased, because obviously, you have more potential APs as part of the process. And although trading firms like Jane Street, etc. are large and are experts, they fundamentally don’t have the trillion-dollar plus balance sheets that large American banks have.”
Bitcoin ETF Approval
The SEC faces a decision deadline of January 15 on BlackRock’s application for a spot Bitcoin ETF, with a final determination due by March 15. Other financial firms, including Grayscale, Bitwise, VanEck, WisdomTree, Invesco Galaxy, Fidelity, and Hashdex, are also awaiting the SEC’s verdict.
The recent update to the application suggests that BlackRock engaged with the SEC led by Gary Gensler on December 11. This marks the third meeting in the past few weeks, following previous sessions on November 20 and 28.
Analysts speculate that the US SEC may opt for simultaneous approval of several spot ETF filings to prevent a single applicant from gaining a first-mover advantage. Approving these ETFs before January 10 could also indicate the SEC’s intention to provide a timeframe for companies to list and trade spot ETFs. As the deadline approaches, any positive signals from the SEC regarding approval could potentially drive the Bitcoin Price (BTC) higher.