Bitcoin ETF Approval Chances At 90%, BlackRock Appoints BTC Buyer

Competition in the Bitcoin exchange-traded fund (ETF) space is heating up, with issuers making adjustments to finalize their product listings ahead of the holiday season. BlackRock's latest update sees a third-party buyer and seller of Bitcoin for the currency, but the Securities and Exchange Commission may not approve it.

On December 21, senior ETF analyst James Seifert reported that BlackRock has appointed a ‘Prime Execution Agent' for Bitcoin buying and selling.

Blackrock finishing details

A ‘prime execution agent' is basically a third-party broker who buys and sells BTC on behalf of BlackRock.

“The SEC may not be comfortable with a general enforcement agent buying bitcoin in a cash model,” Seifert said. He wondered which issuers would improve their records after this.

According to BlackRock Records:

“No shares are issued unless the Bitcoin Custodian or Prime Execution Agent allocates the Trustee's Bitcoin amount to the Trust Account.”

BlackRock did not say who the chief enforcement agent would be. However, Coinbase named it a custodian when it filed for a Bitcoin ETF in June.

Coinbase is currently embroiled in a regulatory battle with the SEC, which in early June accused the company of running an unregistered securities exchange.

Read more: How to prepare for a Bitcoin ETF: A step-by-step approach

Therefore, using Coinbase as a third-party broker is bound to ruffle feathers at the SEC. The agency has been actively targeting US crypto exchanges throughout the year.

Eric Balchunas, an ETF analyst, commented on recent interactions between the SEC and asset managers.

The regulator said on several conference calls this week that exchanges and issuers will either “create cash or wait.”

The SEC is pushing the “cash creation” method of creating and redeeming ETF shares that can use the same assets.

Asked about the January 10 approval, Balchunas replied:

“It's still 90% caught, but 90% is a pretty good hope.”

Create in cash or in kind?

Seifert has released a list of issuers that have upgraded their records to cash creations and have both options.

Bitwise claims to be the first to switch to a cash-only model.

In early January, he said he remained confident of category approval.

“All this is to say – we still think this is happening on January 10th. Some issuers may be behind. In 2023, if there's anything that *can* bring approvals? But I'm expecting approvals from January 8-10.”