{"id":196941,"date":"2023-12-13T23:39:39","date_gmt":"2023-12-13T23:39:39","guid":{"rendered":"https:\/\/tokenstalk.info\/?p=196941"},"modified":"2023-12-13T23:39:39","modified_gmt":"2023-12-13T23:39:39","slug":"blackrocks-revamped-spot-bitcoin-etf-model-allows-easier-participation-by-trillion-dollar-wall-street-banks","status":"publish","type":"post","link":"https:\/\/tokenstalk.info\/bitcoin\/blackrocks-revamped-spot-bitcoin-etf-model-allows-easier-participation-by-trillion-dollar-wall-street-banks\/","title":{"rendered":"BlackRock\u2019s Revamped Spot Bitcoin ETF Model Allows Easier Participation By Trillion-Dollar Wall Street Banks"},"content":{"rendered":"
The world\u2019s largest asset manager, BlackRock, has updated its spot Bitcoin exchange-traded fund (ETF), shifting risk to crypto market makers. The new model, presented by BlackRock in a November meeting with the U.S. SEC, basically opens the door to Wall Street banks like JPMorgan and Goldman Sachs, who cannot hold crypto assets directly.<\/p>\n
BlackRock intends to change the way banks interact with Bitcoin.\u00a0<\/p>\n
According to a memo the Securities and Exchange Commission shared about a Nov.28 meeting between BlackRock, Nasdaq, and the regulator, the new in-kind redemption \u201cprepay\u201d model will allow banking giants to participate more easily in the bitcoin market.<\/p>\n
Banks such as JPMorgan or Goldman Sachs could act as authorized participants for BlackRock\u2019s spot ETF \u2014 allowing them to create new shares in the fund with cash rather than just crypto. This means highly regulated American banks could bypass restrictions preventing them from holding Bitcoin directly on their balance sheets.<\/p>\n
The shift to the mechanics of BlackRock\u2019s spot-based ETF is essential in transferring risk from authorized participants \u2014 big Wall Street banks \u2014 to market makers, thus boosting the ETF’s stability. <\/p>\n
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BlackRock indicated that the revised model provides “superior resistance to market manipulation\u201d \u2014 which has been one of the main concerns that the SEC has repeatedly cited while rejecting all prior spot Bitcoin ETF filings. The model is tailored to strengthen investor protection, slash transaction costs, and improve \u201csimplicity and harmonization\u201d across the broader Bitcoin ETF market.<\/p>\n
The U.S. SEC is widely expected to soon approve spot bitcoin ETFs, which would be a game-changer for the burgeoning crypto industry as they would attract a flood of money from institutional investors.<\/p>\n
BlackRock and other Wall Street heavyweights, including Fidelity and Franklin Templeton, have all lined up to list a spot Bitcoin ETF in the U.S. Memos reveal that the majority of the filers have met with the SEC in recent weeks to go over details regarding how the redemption process would work for a spot ETF.<\/p>\n
BlackRock and Nasdaq met with the SEC for the third time on Dec.11.\u00a0<\/p>\n
BlackRock\u2019s second meeting with the agency on Nov. 28 was a follow-up from its first meeting on Nov. 20, where it introduced its original in-kind redemption plan.<\/p>\n
Meanwhile, analysts have placed 90% odds on spot Bitcoin ETF approvals by January 10, 2024.<\/p>\n