On December 18, BlackRock submitted a proposal for a spot Bitcoin (BTC) exchange-traded fund (ETF) revised to meet regulators’ wishes, potentially winning first approval in the US seems to have increased.
In the latest proposal, BlackRock’s ETF would feature a cash redemption mechanism, a model preferred by the U.S. Securities and Exchange Commission (SEC). The world’s largest asset manager is the latest company to update its proposal amid speculation that the SEC could approve a number of spot Bitcoin ETF applications as early as January.
BlackRock first filed its iShares Blockchain and Tech ETF in November, proposing an in-kind redemption model.
However, the SEC has scrutinized the proposal and raised concerns about investor safety and market manipulation. ETFs typically have two types of redemption and creation mechanisms. In kind or in cash.
The in-kind redemption mechanism, which many investment firms say is more attractive to investors, allows them to exchange their Bitcoin holdings for ETFs. Cash redemption, which the SEC considers a safer and more accessible redemption option, involves exchanging units for equivalent cash value.
BlackRock is the latest of several companies to agree to make cash redemptions until in-kind redemptions are approved. More than a dozen companies have applied for ETFs so far. Ark 21shares has also published an amended proposal with similar changes.
The SEC postponed decisions on ETF applications from Grayscale, Ark21Shares, Vaneck, and Hashdex.
｜Translation: CoinDesk JAPAN
｜Edited by: Toshihiko Inoue
｜Original text: BlackRock Revises Spot Bitcoin ETF Proposal Ahead of Rumored SEC Approvals