Recent statements from Nasdaq executive Giang Bui suggest that an early dismissal of BlackRock’s planned spot Bitcoin exchange-traded fund (ETF) should not significantly impact its eventual success. Bui emphasizes that the rejection primarily stems from regulatory procedural issues rather than the substance or potential viability of the product. These comments provide valuable insights into the current landscape surrounding Bitcoin ETFs and shed light on the industry’s future prospects.
When BlackRock filed its application for a spot Bitcoin ETF on June 15, Nasdaq played a vital role in the process. While BlackRock registered its product through Form S-1, Nasdaq was responsible for filing Form 19-b4, which proposes the necessary rule changes to list the ETF. Unfortunately, on June 30, the U.S. Securities and Exchange Commission (SEC) declared the latter filing, along with others, inadequate, resulting in an early rejection.
A Procedural Hurdle
Giang Bui clarifies that the early rejection should not be seen as a negative signal for BlackRock and other applicants. As per Bui, once the exchange files Form 19-b4, the SEC has seven business days to reject it if it fails to comply with the SEC rules related to the form. Therefore, the initial rejection primarily stems from procedural issues and does not reflect the potential viability of the product.
Enhancing the Filing
Following the initial rejection, Nasdaq and other companies made updates to their respective ETF applications. Nasdaq specifically added Coinbase as a surveillance-sharing agreement partner, a move that Bui acknowledges as unusual. However, Bui explains that this addition was an effort to strengthen the filing and maximize its chances of approval.
BlackRock’s spot Bitcoin ETF application isn’t the only one currently under consideration. Nasdaq is also simultaneously handling a similar proposal from Vaklyrie Investments. Furthermore, other exchanges like Cboe, NYSE Arca, and asset management firms including Ark Invest, VanEck, WisdomTree, Invesco, and Fidelity have filed their own ETF proposals. Most of these proposals describe a surveillance-sharing agreement with Coinbase, presenting a common thread among various applications.
Grayscale’s Unique Approach
In addition to the ongoing ETF applications, Grayscale aims to transform its existing GBTC fund into a spot Bitcoin ETF, albeit in a slightly different manner. Bui acknowledges Grayscale’s proposal and its recent legal victory, highlighting Nasdaq’s intent to analyze the implications of this development for their own filings. This further underscores the evolving nature of the industry.
Delays and Pending Decisions
In late August, the SEC announced a delay in its decision-making process for most of the spot Bitcoin ETF applications mentioned above. While this postponement may create temporary uncertainty, the SEC is expected to make determinations on certain filings in October. This timeline indicates that the future of Bitcoin ETFs will be shaped in the coming months, and upcoming decisions will be critical in shaping the industry’s trajectory.
Overall, Giang Bui’s perspective offers reassurance and a broader understanding of the spot Bitcoin ETF landscape. Despite early rejections, Nasdaq and other companies are actively working to address regulatory issues and enhance their filings. The industry remains optimistic, and forthcoming decisions from the SEC will play a pivotal role in shaping the future of spot Bitcoin ETFs.