Bloomberg analyst James Seyffart recently confirmed that asset manager BlackRock had met with the Stock Exchange and Securities Commission (SECOND). The analyst also provided insight into the topic of the meeting, as many continue to speculate that approval may be near.
BlackRock meeting with the SEC
In a post on his platform X (formerly Twitter), Seyffart confirmed that bitcoin/blackrock-false-bitcoin-spot-etf/” rel=”nofollow noopener” target=”_blank”>Black Rock specifically met with the SEC’s division of trading and markets. This division is responsible for approving or rejecting proposed rule changes. Curiously, the meeting took place on the same day as Grayscale met with the SEC (November 20).
According to the SEC memorandumThe purpose of the meeting was to discuss NASDAQ’s proposed rule change for listing and trading NASDAQ stocks. bitcoin-news/blackrock-bitcoin-spot-etf-approval/” rel=”nofollow noopener” target=”_blank”>iShares bitcoin Trust (Spot bitcoin ETF proposed by BlackRock).
Attached to the memo were slides that bordered on cash and in-kind creation, suggesting that was the main focus of the discussion.
Between the in-kind and cash creation model
As Bloomberg analyst Eric Balchunas states suggested above, the SEC appears to prefer a “cash creation” model rather than the in-kind model. Balchunas had also stated that the SEC was advising exchanges to adopt cash forms for these ETFs. In this sense, it is not unreasonable that the Commission was possibly advising Black Rock reconsider your position.
In his post, Seyffart mentioned that BlakRock seems to prefer payments in kind for their bitcoin Spot ETF. He believes this makes sense as it is probably the “cleanest structure for them and for the end investors.” However, the asset manager would need to consider the SEC’s stance, especially considering they could risk delays if they don’t adjust, like Balchunas warned.
Balchunas also defended the cash creation model. He highlighted the fact that stockbrokers cannot trade bitcoin. A cash creation model therefore puts the onus on issuers to transact in bitcoin and prevents these brokers from dealing with unregistered subsidiaries or third-party companies.
On the other hand, he noted why these issuers and investors would prefer an in-kind model as it is arguably better in terms of spread and taxes. Due to the preference for the in-kind model, only 2-3 filers are said to have planned cash creations. However, looking at the SEC’s position, these filers could soon make amendments to their prospectus.
Regardless of the differences, it would seem that the crypto/sec-announcement-crypto/#:~:text=What%20The%20SEC’s%20Latest%20Announcement%20Means%20For%20The%20Crypto%20Industry,-by%20Scott%20Matherson&text=A%20recent%20announcement%20by%20the,actions%20have%20had%20on%20it.” rel=”nofollow noopener” target=”_blank”>SECOND is more open to approving these funds. However, the Commission appears to be ensuring that there is regulatory compliance on the part of these filers before proceeding with any approval.
<img decoding="async" class="aligncenter size-medium" src="https://technicalterrence.com/wp-content/uploads/2023/11/Bitcoin-Spot-ETF-What-was-the-outcome-of-the-meeting" alt="Tradingview.com bitcoin Price Chart (BlackRock SEC)” width=”2650″ height=”1530″/>
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