Charles Gasparino, reporting for Fox Business, has shed light on the growing confidence within financial circles regarding the Securities and Exchange Commission’s (SEC) anticipated approval of spot Bitcoin Exchange-Traded Funds (ETFs) post January 8, 2024.
Gasparino’s recent update underscored that Bitcoin ETF shares will exclusively be purchasable using cash, omitting the option to buy them with Bitcoin directly. The SEC’s apprehension is rooted in concerns about potential misuse of ETFs for money laundering purposes. In recent weeks, notable players like BlackRock engaged in deliberations with the SEC, fine-tuning the specifics of their forthcoming ETFs. A primary focus of these discussions was the mechanism for creating ETF shares—whether through in-kind or in-cash means.
Offering insights on this development, Bloomberg’s senior ETF analyst Eric Balchunas commented, “SEC’s concerns about money laundering via in-kind creations in a spot Bitcoin ETF are leading them to firmly advocate for cash-only processes, which create a more controlled system.”
In alignment with the regulator’s directives, earlier this week, major ETF issuers such as BlackRock complied by submitting their ETF proposals emphasizing cash-based creations. To clarify, while the ETFs will encompass spot Bitcoin holdings, the acquisition of ETF shares will necessitate investors providing cash to their preferred issuer, who will subsequently procure the spot Bitcoin for inclusion in the ETF.
The evolving narrative around Bitcoin ETFs continues to pivot towards a cash-centric approach, driven by regulatory prudence and efforts to mitigate potential risks associated with cryptocurrency-based financial instruments.
