By Susie Violet Ward · Forbes · 13 December 2023
In November 2023, BlackRock and Nasdaq presented the US Securities and Exchange Commission with a revised model for BlackRock’s proposed spot bitcoin ETF. Described in the article as an in-kind redemption “prepay” model, it would allow Wall Street banks such as JPMorgan and Goldman Sachs, which faced regulatory restrictions on holding bitcoin directly, to create ETF shares using cash rather than bitcoin, shifting risk from authorised participants to market makers.
The article explains that the proposal was also designed to address the SEC’s long-standing concern about market manipulation, while aiming to reduce costs and strengthen investor protection. It notes that Grayscale, Bitwise and Fidelity were also awaiting SEC decisions at the time, and argues that approval could give banks indirect exposure to bitcoin and encourage other institutions to follow.