BlackRock Revises Bitcoin ETF Structure to Enable Wall Street Banks Participation

By: Isha Das

Global asset management titan, BlackRock, has modified its Bitcoin exchange-traded fund (ETF) model to enable easier access for Wall Street banks. The amendment allows the creation of new shares in the fund with cash, presenting a viable opportunity for banking powerhouses such as JPMorgan or Goldman Sachs that face regulatory restrictions on holding Bitcoin or any other cryptocurrency directly on their balance sheets.

This cutting-edge 'prepay' model offers a superior resistance against potential market manipulation, a concern often raised by the United States Securities Exchange Commission (SEC) while assessing spot Bitcoin ETFs applications. The innovative model was discussed in a meeting between six representatives from BlackRock, three from NASDAQ, and the SEC on November 28.

With this advancement, Wall Street banks can act as authorized participants for the fund, ushering a potential shift in bank-crypto engagement dynamics. While the new structure could propel integration of the traditional banking sector with the burgeoning crypto economy, official endorsement by suitable regulatory entities remains the crucial deciding factor.