BlackRock and SEC Discuss iShares Bitcoin Trust Listing on Nasdaq

On November 20, 2023, a critical meeting was held between the United States Securities and Exchange Commission (SEC) and representatives from BlackRock, Inc., and the Nasdaq Stock Market LLC. The meeting’s primary focus was the discussion of the iShares Bitcoin Trust and its potential listing on Nasdaq as a spot Bitcoin exchange-traded fund (ETF).

The SEC’s Division of Trading and Markets hosted the meeting, attended by key personnel including David Shillman, Tom McGowan, Randall Roy, Ray Lombardo, Molly Kim, Edward Cho, Sarah Schandler, and Stacia Sowerby. Representing BlackRock were Rachel Aguirre, Adithya Attawar, Shannon Ghia, Robert Mitchnick, Charles Park, Marisa Rolland, and Ben Tecmire. Additionally, Eun Ah Choi, Jonathan Cayne, Giang Bui, and Ali Doyle represented The NASDAQ Stock Market LLC.

BlackRock’s presentation to the SEC included a detailed exposition of two potential models for the iShares Bitcoin Trust: the “In-Kind Redemption Model” and the “In-Cash Redemption Model.” These models outlined the mechanics of how the ETF could operate, focusing on the redemption process involving market makers, bitcoin custodians, and various exchanges.

The In-Kind Redemption Model entails a process where the ETF issuer instructs the Bitcoin Custodian to release bitcoin to a market maker, who may then unwind the bitcoin position. This model involves various parties, including a U.S. Registered Broker/Dealer, spot crypto exchanges, and a listing exchange.

The In-Cash Redemption Model, on the other hand, involves the ETF issuer trading with the market maker to sell bitcoin for USD. This model includes additional steps involving the Bitcoin Custodian moving cash out of cold storage and the market maker delivering shares to the Transfer Agent via an Authorized Participant.

The SEC’s response to BlackRock’s presentation and proposed models remains unclear, with no information on whether the SEC plans to approve the listing of a spot Bitcoin ETF. The approval of such an ETF would represent a major milestone in the acceptance of cryptocurrency in mainstream financial markets.

This meeting comes amid ongoing reviews by the SEC of various proposals for spot crypto ETFs from several firms, including Fidelity, WisdomTree, Invesco Galaxy, Valkyrie, VanEck, and Bitwise, alongside BlackRock. The push for a spot Bitcoin ETF has seen several delays and denials, creating a sense of anticipation and uncertainty in the crypto and financial markets.

The SEC has also met with executives from Grayscale on the same day to discuss their proposal for a Bitcoin ETF. The meeting with BlackRock and the ongoing reviews indicate the SEC’s active engagement in understanding and potentially integrating cryptocurrencies into regulated financial products.

BlackRock’s application to list a spot Bitcoin ETF on the Nasdaq was initially filed in June 2023. The discussion around Bitcoin ETFs has been fueled by a 2019 video of SEC Chair Gary Gensler, where he criticized the commission’s “inconsistent” approach to Bitcoin products. The approval of a spot Bitcoin ETF by the SEC would be a landmark decision, potentially paving the way for wider acceptance and integration of cryptocurrencies in the mainstream financial sector.

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Cboe Digital Set to Launch Bitcoin and Ether Futures Trading in January 2024

Cboe Global Markets, Inc. has announced a groundbreaking development in cryptocurrency trading, according to Prnewswire. Beginning January 11, 2024, Cboe Digital will launch margin futures trading for Bitcoin and Ether. This initiative positions Cboe Digital as the first U.S.-regulated crypto native exchange and clearinghouse to offer both spot and leveraged derivatives trading on a single platform, representing a significant advancement in the integration of cryptocurrency into the broader financial market.

The introduction of margin futures trading by Cboe Digital is a strategic move that combines the robustness of traditional financial market infrastructure with the burgeoning field of digital assets. This approach allows traders to engage in futures trading without the need to post full collateral upfront, thus offering greater capital efficiency compared to traditional non-margined futures trading. This margin model not only enhances capital efficiency but also marks an evolutionary step in crypto trading, catering to both institutional and individual investors.

The launch is backed by a coalition of 11 leading firms from both the cryptocurrency and traditional financial sectors, including B2C2, BlockFills, CQG, Cumberland DRW, Jump Trading Group, Marex, StoneX Financial, Talos, tastytrade, Trading Technologies, and Wedbush. These partnerships reflect a strong industry support and a shared vision for advancing secure and transparent trading in digital assets.

John Palmer, President of Cboe Digital, emphasized the milestone this launch represents in building trusted and transparent crypto markets. He highlighted the importance of derivatives in providing liquidity and hedging opportunities in the crypto space. Supporting voices from the industry, including Nicola White of B2C2 and Chris Zuehlke of Cumberland DRW, also stressed the role of Cboe Digital’s initiative in enhancing institutional adoption of cryptocurrencies and maturing the crypto asset class.

Cboe Digital’s expansion into Bitcoin and Ether futures trading complements its existing offerings in the spot crypto market, including Bitcoin, Bitcoin Cash, Ether, Litecoin, and USDC. The platform will provide detailed margin requirements and risk management tools on its website, ensuring a comprehensive and transparent trading experience.

Cboe Global Markets is renowned for delivering market infrastructure and tradable products across multiple asset classes, including equities, derivatives, FX, and digital assets. Cboe Digital operates in compliance with regulatory standards set by the CFTC and is licensed by the New York State Department of Financial Services. Looking ahead, Cboe Digital is exploring expansion into physically delivered products, contingent on regulatory approvals, signaling its commitment to innovation and growth in the digital asset space.

Cboe Digital’s launch of Bitcoin and Ether margin futures is a landmark event that bridges the gap between traditional finance and the evolving world of digital assets. This initiative is set to enhance trading efficiency, liquidity, and accessibility in the cryptocurrency market, marking a new chapter in the integration of digital currencies into the global financial ecosystem.

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OpenTrade and WOO X Unite to Offer Tokenized T-Bills to Asian Investors

On September 29, 2023, OpenTrade, a notable platform bridging traditional financial markets with digital asset realms, declared a strategic collaboration with WOO X, enabling its user base to tap into tokenized Treasury Bills (T-Bills) and avail USDC-collateralized loans against liquid assets on a blockchain infrastructure, according to WOO official blog. This initiative is engineered through OpenTrade’s recent unveiling of tokenized T-Bills on Circle Research’s Perimeter Protocol.

The collaboration stems from a rising demand for tokenized T-Bills, driven by the comparatively higher yields from US government bonds against those found in decentralized finance (DeFi). WOO X, through this partnership, aims to fortify its foothold in the Asian region by offering a low-cost switch to tokenized T-Bills for its users. Jack Tan, WOO’s Founder and CEO, emphasized the commitment to furnishing customers with yield products anchored to real-world financial assets, and envisages an array of Real-World Asset (RWA) yield products delivered via the OpenTrade platform.

OpenTrade’s CEO, Dave Sutter, underlined the ambition of paving a “flatter, smarter, more efficient, and more inclusive financial markets” through this venture. The utilization of Circle Research’s Perimeter Protocol is lauded as a fundamental technological underpinning for a secure, scalable, and composable platform conducive for this evolution. OpenTrade emerges as a pivotal conduit linking traditional financial landscapes with the burgeoning digital asset space, heralding a new era of financial ingenuity and inclusivity.

In a concurrent development, WOO X unveiled its successful integration with South Korea’s CODE compliance solutions, epitomizing a strategic endeavor to amplify its presence in Asia, particularly South Korea—known for its voluminous active trader market. A cardinal aspect of CODE compliance entails the verification of user addresses prior to withdrawal, thus broadening the spectrum of WOO offerings accessible to Korean clientele.

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Crypto Presents Financial Stability Concerns, Bank of England Deputy Governor Warns

A senior Bank of England official says that crypto could potentially be a threat to overall financial stability.

In a new speech, deputy governor Jon Cunliffe weighs the pros and cons of crypto technology. He says that while “a prospect of radical improvements in financial services” exists, current crypto applications present financial stability concerns.



“A severe fall in the value of crypto assets could trigger margin calls on crypto positions forcing leveraged investors to find cash to meet them, leading to the sale of other assets and generating spillovers to other markets.

We saw last year, during the dash for cash, that this dynamic can put pressure on the amount of liquidity in the system. Similarly, there is the possibility of contagion. A large fall in crypto valuations could affect investor risk sentiment more broadly, causing investors to sell other assets that are judged to be risky and those perceived to have a similar investor base.”

The deputy governor also stressed the purpose and function of any future regulation affecting the digital asset space.

“From a financial stability and from a regulatory perspective, what matters is not the underlying technology but how it is used and for what purpose. In other words, we should not regulate technologies but rather the activities the technology is performing.”

Earlier this week, the Bank of England’s Financial Policy Committee (FPC) issued a warning to financial institutions considering jumping into the crypto markets, noting that “systemic risks” could arise if digital assets become further integrated into the financial system.

Read Cunliffe’s full speech here.

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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