Despite an initial setback in the approval process for BlackRock’s Bitcoin ETF, NASDAQ Giang Bui remains hopeful for its ultimate success and sees a bright institutional future for Bitcoin ETFs.
Early Rejections Not a “Death Knell” for Bitcoin ETFs
In what can be described as a regulatory hiccup, BlackRock’s move to secure a spot Bitcoin exchange-traded fund (ETF) faced a premature hurdle. On June 15, the investment management behemoth submitted its application. While BlackRock presented its Form S-1 for product registration, NASDAQ was at the helm, navigating the procedural intricacies with its Form 19-b4 – a necessary document proposing rule changes to facilitate the product listing.
However, the trajectory took a sharp detour on June 30. The U.S. Security and Exchange Commission (SEC), not entirely convinced with the latter’s filing along with several others, termed it “inadequate,” resulting in its premature dismissal. Notably, this decision revolved more around the SEC’s regulatory procedures than any underlying issues with the product itself.
Giang Bui, NASDAQ’s Head of U.S. Equities & ETPs, clarified the misunderstanding in a conversation with Forbes. “The SEC’s initial rejection is procedural, coming into play if the Form 19-b4 doesn’t align with specific SEC rules. It shouldn’t be construed as a comment on the product’s viability,” Bui noted.
Subsequent to this procedural obstacle, NASDAQ, in collaboration with others, revamped their ETF applications. One notable amendment was the explicit mention of Coinbase as a partner for surveillance-sharing. This move, albeit unusual, was NASDAQ’s strategic ploy to bolster their filing, making it “as strong as possible,” as per Bui.
A Congested Field of Contenders
While BlackRock’s ETF proposal might have garnered significant attention, it isn’t a lone warrior in this domain. NASDAQ is concurrently processing a similar pitch from Valkyrie Investments. In parallel, Cboe is sifting through applications from several asset management juggernauts, including Ark Invest, VanEck, WisdomTree, Invesco, and Fidelity. Not trailing far behind, NYSE Arca is in the midst of assessing an ETF proposal from Bitwise. The commonality among many of these proposals is the surveillance-sharing pact inked with Coinbase.
Another intriguing player in the arena is Grayscale, aiming to metamorphose its current GBTC fund into a spot Bitcoin ETF, albeit through a slightly different modus operandi. Bui recognized Grayscale’s efforts and their recent legal win, stating that NASDAQ is in the process of “analyzing what that means for [its] filings.”
Rounding off the current landscape, as of late August, the SEC played the waiting game by postponing decisions on the majority of the Bitcoin ETFs in question. But optimism reigns, as the decision for some is anticipated this coming October. Reinforcing the positive sentiment, Bui emphasized that the US Bitcoin spot ETF is poised to be an “efficient and attractive” proposition for the institutional behemoths.