BlackRock Updates Filing for Bitcoin ETF, Embraces Cash Redemptions

by Alisa Davidson

Published: December 19, 2023 at 10:40 am Updated: December 19, 2023 at 10:40 am

by Victor Dey

Edited and fact-checked:
December 19, 2023 at 10:40 am

In Brief

BlackRock revisions proposed filing for a spot Bitcoin ETF to enhance the likelihood of obtaining approval from SEC.

BlackRock Updates Filing for Bitcoin ETF, Embracing Cash Redemptions

Multinational investment company BlackRock revised its proposed filing for a spot Bitcoin exchange-traded fund (ETF) and incorporated the option for cash redemptions. The adjustment is seen as a strategic move to enhance the likelihood of obtaining approval from the US Securities and Exchange Commission (SEC).

The S-1 amendments, filed on Dec. 18, relate to the cash creation and redemption model for proposed spot Bitcoin ETFs. BlackRock has chosen to embrace the cash redemption system, deviating from in-kind redemptions, which involve non-monetary payments such as Bitcoin.

“The Trust issues and redeems baskets on a continuous basis. These transactions will take place in exchange for cash. Subject to the in-kind regulatory approval, these transactions may also take place in exchange for Bitcoin,”

said BlackRock’s iShares Bitcoin Trust ETF representative.

The SEC’s “cash-only” requirement implies that authorized participants can only acquire more ETF shares by contributing the appropriate amount of cash. Previously, BlackRock intended to redeem baskets exclusively in Bitcoin or in-kind.

Crypto Market Rebounds in Anticipation of SEC Decision

A surge in submissions for spot Bitcoin and Ethereum ETFs, involving well-established companies in traditional finance, has revived the crypto market this year following a sequence of setbacks in 2022.

Currently, several companies, including BlackRock, Fidelity, VanEck, Valkyrie and Franklin Templeton, are competing for the approval of a spot Bitcoin ETF.

Despite the SEC‘s consistent denial of all applications, citing concerns about potential fraud, ongoing discussions with representatives from applicant firms have centered around addressing technical intricacies in their fund proposals. There also remains optimism among market participants for an ETF approval early next year.

In the recent development, VanEck’s chief executive officer suggested that approval for all spot Bitcoin ETF applications is anticipated to occur on the same day, while Bitcoin is expected to reach new record heights within the next 12 months.

BlackRock’s amended filing for a spot Bitcoin ETF highlights its adaptive approach to regulatory nuances, providing the company with a strategic edge to enhance the prospects of approval with the SEC.

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About The Author

Alisa is a reporter for the Metaverse Post. She focuses on investments, AI, metaverse, and everything related to Web3. Alisa has a degree in Business of Art and expertise in Art & Tech. She has developed her passion for journalism through writing for VCs, notable crypto projects, and engagement with scientific writing.

Alisa Davidson