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Spot Bitcoin ETF: Analyst Says SEC Engaging Exchanges—Approval Coming?

Press Releases Crypto News Bitcoinist Spot Bitcoin ETF: Analyst Says SEC Engaging Exchanges—Approval Coming?

The prospect of a spot Bitcoin ETF (exchange-traded fund) trading in the United States has been the major topic of discussion in the cryptocurrency space over the past few weeks. In the latest development, a Bloomberg analyst reported that the US Securities and Exchange Commission has been engaging with exchanges concerning the spot Bitcoin ETF applications.

Here’s Why SEC Interacted With Exchanges This Week

On Friday, November 17, Bloomberg analyst Eric Balchunas provided an update on the potential approval of spot Bitcoin exchange-traded funds by the SEC. In a post on X, Balchunas claimed that the financial regulator is instructing the Bitcoin ETF applicants to handle funds in a certain way.

Eric Balchunas wrote on X:

Hearing chatter SEC’s Trading & Markets engaged with exchanges this week on spot bitcoin ETF 19b-4s, is advising them they’d like the ETFs to do cash creates (vs in-kind), and has asked them to get in amendments in the next couple weeks.

For context, “cash create” and “in-kind” refer to the two main methods for creating and redeeming exchange-traded funds. In a “cash create” situation, authorized participants exchange cash equivalent to the shares they want, while “in-kind” allows authorized participants to provide an ETF with a basket of securities or assets replicating the ETF’s underlying asset.

Balchunas highlighted that cash creates make sense because they offer fewer limitations to broker-dealers. “Broker-dealers can’t deal in Bitcoin, so doing cash creates puts an onus on issuers to transact in Bitcoin and keeps broker-dealers from having to use unregistered subsidiaries or third party firms,” the Bloomberg analyst noted.

Going further, Eric Balchunas mentioned that although this move by the SEC was unexpected, it bodes good signs about the potential approval of a spo

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Author: Opeyemi Sule

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