In the race to launch the inaugural spot Bitcoin exchange-traded fund (ETF), Swiss asset manager Pando Asset officially entered the competition by filing an S-1 form with the Securities and Exchange Commission (SEC). This move contributes to the expanding roster of contenders vying for approval of a spot Bitcoin ETF. It heightens anticipation within the industry for the SEC’s forthcoming decision.
Pando Asset’s Spot Bitcoin Trust
Subject to regulatory approval, the Pando Asset Spot Bitcoin Trust is poised to be traded on the Cboe BZX Exchange. Coinbase will be acting as its custodian. The filing specifies the utilization of CME’s CF Bitcoin Reference Rate for determining the bitcoin price within the ETF. Pando Asset already provides exchange-traded products, monitoring the prices of leading cryptocurrencies. This is on the SIX Swiss Exchange for European traders, as detailed on its website.
The Ongoing Approval Struggle
While the cryptocurrency industry anxiously awaits the introduction of the inaugural spot crypto ETF. However, the SEC has yet to endorse any of the applications it has received. Leading asset management entities, including BlackRock, Fidelity, 21Shares & Ark Invest, Bitwise, VanEck, Wisdomtree, Invesco, Valkyrie, Global X, Hashdex, and Franklin Templeton, are all in a state of anticipation for regulatory approval. Recent developments suggest a potential acceleration in the SEC’s review process. This is because applications from Franklin Templeton and Hashdex have moved into a public comment period.
Also Read: BlackRock Joins Grayscale in Spot Bitcoin ETF Pursuit: Talks with SEC
BlackRock’s Modified Model
In a significant development, BlackRock, a prominent player in the ETF competition, engaged in discussions with the SEC on Nov. 28. BlackRock presented a revision to its redemption model, addressing concerns raised by the SEC in a prior meeting. The SEC had expressed apprehensions regarding the balance sheet impacts and risks associated with U.S. broker-dealers engaging with offshore crypto entities. BlackRock’s proposed solution aims to resolve these concerns, primarily centered on the balance sheet of the U.S. broker/dealer market maker.
Potential Resolution
BlackRock’s proposed resolution involves creating a cash receivable from the offshore market maker to the onshore market maker. Then it will subsequently transfer the cash directly, ensuring it remains onshore upon completion. Analysts, such as Scott Johnsson from Van Buren Capital, view this proposal as a potential resolution to the SEC’s concerns, emphasizing that if the balance sheet of the U.S. broker/dealer market maker is the primary issue, BlackRock’s proposal should effectively address the SEC’s reservations.
With Pando Asset entering the Bitcoin ETF race and BlackRock working to assuage regulatory concerns through a modified model, the competition for the inaugural spot Bitcoin ETF intensifies. Recent SEC actions, including discussions with BlackRock and Invesco, along with certain applications moving into a public comment period, hint at potential shifts in the regulatory landscape. The industry remains vigilant, eagerly anticipating the approval of the first-spot Bitcoin ETF and gauging its potential impact on the broader cryptocurrency market.
Also Read: No Reason to Stop a Spot Bitcoin ETF, SEC Commissioner Says