BitcoinBTC is tightly wound after surging higher over the last two months (with Coinbase this week revealing a new multi-trillion dollar opportunity).
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The bitcoin price has more than doubled over the last 12 months, propelling bitcoin and crypto back into the limelight—despite surprise fears the U.S. government and BlackRock’s potential bitcoin spot exchange-traded fund (ETF) could be about to “kill” bitcoin.
Now, as bitcoin and crypto traders gauge a BlackRock “breakthrough,” one high-profile ETF analyst has claimed leaked U.S. Securities and Exchange Commission (SEC) chats reveal the agency is negociating with crypto exchanges on ETF applications.
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“Hearing chatter SEC’s Trading and 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 next couple weeks,” Eric Balchunas, Bloomberg Intelligence senior ETF analyst, posted to X (Twitter). “This isn’t unexpected but [a] good sign nonetheless.”
Cash or in-kind refers to the funds’ method of redemptions, with in-kind funds offering investors leaving the fund a payment other than cash.
“Update on the spot bitcoin ETF saga,” another Bloomberg Intelligence ETF analyst, James Seyffart, commented on Balchunas’ post, adding it doesn’t change the pair’s 90% likelihood prediction of a bitcoin spot ETF being approved this year. “Nothing groundbreaking. Nothing changes. But shows progress is still happening and things moving forward.”
However, Gabor Gurbacs, the founder of rewards app PointsVille and an advisor to investment manager VanEck, warned the SEC’s bid for cash bitcoin spot ETFs is a “sign that regulators don’t [or are] unwilling understand and accept the best aspects of ETFs and bitcoin. In-kind creates are simply much more efficient. Anyone managing an ETF knows this,” Gurbacs posted to X.
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Balchunas’ post caused the bitcoin price to shoot sharply higher, climbing form $36,000 per bitcoin to almost $37,000 as edgy traders jumped on signs the SEC could be about to approve bitcoin spot ETF applications from Wall Street giants that look after a combined $17.7 trillion as a closely-watched “window” closed.
The bitcoin price was turbo-charged in June after BlackRock, the world’s largest asset manager handling around $10 trillion on behalf of clients, applied to create a bitcoin spot ETF with Coinbase as its custodian.
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