he U.S. Securities and Exchange Commission (SEC) has recently held meetings with major players in the cryptocurrency industry, Grayscale and BlackRock, to discuss the potential approval of Bitcoin exchange-traded funds (ETFs). These meetings are significant as they shed light on the regulatory progress and growing interest in the cryptocurrency market.
SEC Meets with Grayscale on Bitcoin ETF Conversion
In one of the meetings, the SEC's Division of Trading and Markets engaged with Grayscale Investments regarding their proposal to convert their listed Bitcoin Trust into a spot Bitcoin ETF. The discussion primarily focused on NYSE Arca's proposed rule change to list and trade shares of the Grayscale Bitcoin Trust (BTC) under NYSE Arca Rule 8.201-E. David Shillman, the Associate Director in the SEC's Division of Trading and Markets, and Michael Sonnenshein, the CEO at Grayscale Investments, were among the participants. This meeting indicates the SEC's willingness to explore the potential benefits and risks associated with Bitcoin ETFs.
BlackRock Addresses Concerns with In-Kind Model Design
Another meeting involved representatives from BlackRock and the Nasdaq. The SEC officials discussed BlackRock's revised In-Kind model design for its proposed Bitcoin ETF. The In-Kind model aims to link the ETF's share price closely with the value of Bitcoin. However, the SEC raised concerns about the involvement of U.S. broker-dealers directly handling Bitcoin. In response, the SEC suggested a Cash model, which would be safer for broker-dealers but may introduce operational complexities for BlackRock. The revised In-Kind model presented by BlackRock addressed some of the SEC's concerns, potentially paving the way for further discussions and progress towards Bitcoin ETF approval.
Potential Impact on Bitcoin Price
The SEC's pending approval of Bitcoin ETFs has the potential to significantly impact the price of Bitcoin. As cryptocurrency enthusiasts anticipate this regulatory milestone, the price of Bitcoin continues to climb. At present, Bitcoin is trading at $38,223, showing a 1% increase from the previous day and an 11% increase over the past 30 days. The approval of spot Bitcoin ETFs could further fuel the upward trajectory of Bitcoin's price, attracting more investors and increasing market liquidity.