According to information shared by Bloomberg ETF analyst Eric Balchunas, BlackRock met again with the SEC's Trading and Markets department yesterday and presented a “revised” in-kind model design for the Bitcoin Spot ETF based on SEC staff comments at the November 20 meeting.
The following people, including Nasdaq officials, were present at the meeting between BlackRock and the SEC:
- Robert Mitchnick, BlackRock, Inc.
- Adithya Attawar, BlackRock, Inc.
- Shannon Ghia, BlackRock, Inc.
- Charles Park, BlackRock, Inc.
- Marisa Rolland, BlackRock, Inc.
- Ben Tecmire, BlackRock, Inc.
- Jonathan Cayne, The NASDAQ Stock Market LLC
- Giang Bui, The NASDAQ Stock Market LLC
- Ali Doyle, The NASDAQ Stock Market LLC
The in-kind Bitcoin Spot ETF can be described as a type of exchange-traded fund that holds BTC directly as the underlying asset. When an investor purchases shares in such a Bitcoin ETF, the provider company purchases an equivalent amount of BTC on the open market and adds it to its holdings. Likewise, when they sell their shares, the ETF provider sells the equivalent amount of BTC from their holdings.
On the other hand, a cash Bitcoin Spot ETF does not directly own the underlying asset (Bitcoin in this case). Instead, it uses financial instruments such as futures contracts to copy the price of Bitcoin. So instead of buying and holding Bitcoin directly, these ETFs purchase Bitcoin futures contracts that promise delivery of Bitcoin at a future date.
BlackRock is trying to produce a more attractive product for investors by turning to an in-kind method for its spot BTC ETF, but this will likely be questioned by the SEC. The SEC seems inclined to approve a more cash-focused Bitcoin Spot ETF.
*This is not investment advice.
