Bitcoin has broken back through the $37,000 (£29,561) mark, rising by almost 3% in the past 24 hours. The uptick comes after representatives from BlackRock (BLK) and the Nasdaq (^IXIC) met with the US Securities and Exchange Commission (SEC) to discuss the asset manager’s spot bitcoin ETF filing.
A spot bitcoin ETF is a financial product that investors hope will open the gateway for mainstream capital to flood the crypto market.
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After the news of the BlackRock meeting, the world’s largest cryptocurrency by market cap (BTC-USD) is now changing hands for $37,345, according to CoinGecko.
BlackRock representatives meet with the SEC
According to an SEC memorandum, BlackRock had a meeting with the financial regulatory body about their proposed spot bitcoin ETF product, called the iShares Bitcoin Trust.
Read more: Spot bitcoin ETF approval unlikely this year, says analyst
The details of the meeting include a presentation on how BlackRock could use an in-kind or in-cash redemption model for its iShares Bitcoin Trust.
The memorandum from the SEC did not indicate how the regulator responded to BlackRock’s proposed redemption models.
“Looks like BlackRock also met with SEC! There’s a couple slides in relation to in-kind vs cash creation. Based on this it looks like BlackRock prefers in-kind for their bitcoin ETF, makes sense as its probably cleanest structure for them and end investors,” Bloomberg analyst James Seyffart posted on X.com.
SEC also held ETF meeting with Grayscale
Seyffart referred to another spot bitcoin ETF meeting that occurred this week between the SEC and another fund manager. SEC officials met with Grayscale representatives on Monday as part of the firm’s bid for listing a spot bitcoin ETF.
According to that memorandum from the SEC, Grayscale CEO Michael Sonnenshein, legal chief Craig Salm and other executives met with the SEC’s division of trading and markets. The memo said discussions “concerned NYSE Arca, Inc.’s proposed rule change to list and trade shares of the Grayscale Bitcoin Trust (BTC) under NYSE Arca Rule 8.201-E.”
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The meetings between the SEC and fund managers have been interpreted by analysts as signaling progress toward potential approval of a spot bitcoin ETF filing.
In late August of this year, Grayscale Investments won a key legal battle in its struggle to convert its Grayscale Bitcoin Trust (GBTC) into an exchange-traded fund (ETF).
On August 29, Judge Neomi Rao of the US District of Columbia Court of Appeals ruled that the SEC was incorrect in rejecting Grayscale’s application to convert the GBTC into a spot ETF. The SEC had initially rejected the application in June 2022, citing insufficient safe practices and fraud protection mechanisms.
Advantages of a spot bitcoin ETF
The approval of a spot bitcoin ETF could bestow several advantages on the cryptocurrency sector. Firstly, the regulatory oversight of such an ETF under the jurisdiction of the SEC would contribute to bitcoin’s credibility.
Read more: US crypto crackdown ‘an opportunity for the UK’
Additionally, the accessibility of ETFs to the general public would facilitate more widespread bitcoin investment. The SEC’s role in upholding rigorous standards is seen as a factor that enhances investor protection.
An approval of a spot Bitcoin ETF also holds the potential for substantial investments from pension and mutual funds, potentially directing billions into the cryptocurrency market and fostering institutional adoption.
Watch: US crypto crackdown ‘an opportunity for the UK’ | The Crypto Mile
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