Hassan Maishera
TL;DR
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BlackRock has revised its spot BTC ETF application with the SEC.
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The new proposal now includes cash redemptions.
BlackRock Revises its Spot BTC ETF Proposal
BlackRock, the world’s largest asset management firm, filed a revised spot bitcoin exchange-traded fund (ETF) proposal on Monday. The revised proposal seeks to appease the US SEC and could boost BlackRock’s chances of securing the first spot Bitcoin ETF in the United States.
Per the new proposal, Blackrock's ETF will feature cash creation and redemption mechanisms. The SEC favors this model and had previously scrutinized BlackRock over this.
Thanks to this latest development, the SEC has become the latest entity to update its spot Bitcoin ETF proposal amid speculation that the US SEC could approve several spot Bitcoin ETF applications as early as January.
The SEC had previously scrutinized BlackRock’s proposal, raising concerns regarding investor safety and market manipulation. ETFs usually have one of two types of redemption and creation mechanisms: In-kind or cash.
The in-kind redemption structure is more appealing to investors and it enables firms to redeem shares for BTC held by their ETFs. however, the SEC considers Cash redemptions safer and more accessible to investors. This model replaces the shares with their equivalent cash value.
BlackRock has now amended its proposal to issue cash redemptions until in-kind redemptions are approved.
The spot Bitcoin ETF way continues to heat up as more than a dozen firms have filed ETF applications so far. The US SEC has delayed decision on some of these applications including those submitted by Grayscale, Ark 21shares, Vaneck and Hashdex.
