Investment giant BlackRock has announced a major change to its Bitcoin-focused ETF (Exchange Traded Fund) application, including the cash redemption option. This move follows a recent industry trend, with other companies such as Ark Invest and WisdomTree making similar adjustments to their ETF registrations.
According to BlackRock’s recent document, amended after the manager’s meeting with the SEC, the process of creation and redemption of ETF shares will take place in cash, although there is the possibility of transactions with Bitcoin, subject to approval by Nasdaq. Each block of shares involved in these transactions corresponds to 40,000 units.
Ark Invest’s move also reflects this preference for cash transactions, while WisdomTree presented a slightly different proposal. In this proposal, WisdomTree suggests the possibility of distributing Bitcoin proceeds in kind (i.e. in the form of Bitcoin) or converting them into cash during the redemption process.
The changes are important because they mark the end of a lengthy period of discussions and negotiations between the SEC and investment funds. Therefore, approvals for such ETFs are expected to be granted within the next three weeks, with the possibility of negotiations starting as early as January.
The SEC appears determined to ensure that the issuance and redemption of Bitcoin ETFs is done in cash, setting a new standard in the cryptocurrency investment industry.
SEC has three weeks to approve Bitcoin ETFs
BlackRock’s proposed Bitcoin spot ETF was coded IBIT and to be approved the SEC required the approval of a basic cash redemption model and will only allow cash redemptions (with bitcoin) in special cases.
According to BlackRock experts, the in-kind repayment model will provide asset managers with greater flexibility in managing their portfolios.
The SEC argued that it prefers the model that requires BlackRock to sell bitcoins during the buyback and compensate investors in cash.
Over the past two months, representatives from BlackRock, Grayscale and Fidelity have been actively engaged with the SEC to discuss adjustments for the future launch of ETFs.
With all orders changing this week, approval could happen next week with trading beginning in early 2024, or the SEC could wait until the last second (January 10) to approve ETFs, which will lead to negotiations in start in February.
Regardless, after two months of meetings between the SEC and the executives, it appears the case has come to a conclusion and approval is expected within three weeks.
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
