Nasdaq executive says BlackRock’s first Bitcoin ETF rejection was ‘purely procedural,’ not final

In a recent statement, a Nasdaq executive has declared that the initial rejection of BlackRock’s first Bitcoin Exchange Traded Fund (ETF) by regulators was merely a procedural setback and not a final decision. The executive emphasized that the rejection was likely based on administrative reasons, thereby suggesting that the chances for the approval of a Bitcoin ETF in the future are still plausible. This development provides hope for investors and enthusiasts of cryptocurrencies, indicating that the path to mainstream acceptance of Bitcoin as an investment asset may not be as arduous as previously thought.

BlackRock’s First Bitcoin ETF Rejection Seen as Procedural, Not Final

The recent early dismissal of BlackRock’s proposed spot Bitcoin ETF is not expected to have a significant impact on its eventual success. This assurance comes from Giang Bui, a notable executive at Nasdaq, who stated that the rejection was purely procedural and did not reflect the potential viability of the product. The rejection by the U.S. Securities and Exchange Commission (SEC) was primarily due to regulatory procedural issues rather than any fundamental problems with the proposed ETF.

BlackRock’s Spot Bitcoin ETF Application Process

BlackRock submitted an application for a spot Bitcoin exchange-traded fund (ETF) on June 15. While BlackRock filed the necessary forms to register its product, Nasdaq was responsible for filing the rule changes needed to list the ETF. The SEC declared the filing, along with others, inadequate on June 30, leading to its early rejection. However, this rejection should not be interpreted as a negative sign for BlackRock’s application.

Nasdaq’s Head of U.S. Equities & ETPs, Giang Bui, explained that after the exchange files the necessary form, the SEC has seven business days to reject it if it doesn’t comply with the required rules. This initial rejection is only a procedural step and does not indicate the product’s viability. Following the rejection, Nasdaq and other parties made updates to their applications, including explicitly listing Coinbase as a surveillance-sharing agreement partner to strengthen their filings.

Other Pending Spot Bitcoin ETF Applications

BlackRock’s spot Bitcoin ETF application is not the only one under consideration. Nasdaq is also handling a similar proposal from Valkyrie Investments. Additionally, other asset management firms like Ark Invest, VanEck, WisdomTree, Invesco, Fidelity, and Bitwise have submitted proposals to Cboe for consideration. Many of these proposals describe a surveillance-sharing agreement with Coinbase, making them similar in nature.

Grayscale Investments, on the other hand, aims to convert its existing GBTC fund into a spot Bitcoin ETF through a different approach. Bui acknowledged Grayscale’s proposal and its recent legal victory, stating that Nasdaq is currently analyzing the implications for their own filings.

The SEC has temporarily delayed its decision on most of the spot Bitcoin ETF filings until October. This delay gives the SEC more time to review the applications and make a final determination.

In conclusion, despite the early rejection, BlackRock’s spot Bitcoin ETF has a good chance of eventual success. The regulatory procedures need to be followed, and updates and adjustments can be made to strengthen the applications. The fact that multiple reputable firms are pursuing spot Bitcoin ETFs indicates a growing interest in these investment products and the potential for their widespread adoption.

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