Bitwise, BlackRock update filings in push for first U.S. spot Bitcoin ETF

On Dec 5, 2023

Bitwise and BlackRock, two asset managers that plan to offer a spot Bitcoin exchange-traded fund (ETF), have submitted updated filings to securities regulators.

Bitwise filed an amendment to its S-1 registration form with the U.S. Securities and Exchange Commission (SEC) on Dec. 4. BlackRock filed an amendment to its own S-1 form on the same day for its own ETF, the iShares Bitcoin Trust.

At least ten asset managers intend to offer a spot Bitcoin ETF. Bloomberg ETF analyst Eric Balchunas suggested that other updated S-1 filings will likely emerge over the coming week. He added that these filings will address matters raised in recent discussions between the SEC and ETF applicants.

Balchunas believes there is a 90% chance that the SEC will approve one or many prospective spot Bitcoin ETFs by Jan. 10, 2024. Though the SEC has approved Bitcoin and Ethereum futures ETFs, it has not yet approved any spot Bitcoin ETF, and no such ETF exists in the U.S. at present.

Cash vs. in-kind creations

Balchunas also drew attention to ETF creation methods, writing:

“The big thing everyone is buzzing about is whether SEC will allow in-kind creations. Rumor has it only cash creates will be allowed in first grouping. Many issuers [are] ready for both (if BlackRock wins over [the] SEC, many will do in kind as well. If not they’ll do cash just to get out).”

Cash creations would allow some ETF participants to transact in cash, whereas in-kind creations would allow those participants to transact with Bitcoin. Balchunas previously suggested that the distinction is an issue because current regulations may make it difficult for brokers to transact in Bitcoin.

BlackRock’s latest meeting specifically concerned cash and in-kind models, as indicated by an attached presentation. As such, the company’s latest amendment may contain changes that respond to those discussions.

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