BlackRock Finalizing Bitcoin ETF Application with Cash Creations
BlackRock, the world’s largest asset manager, is in the final stages of its Bitcoin exchange-traded fund (ETF) application. This move aligns with US financial regulators’ preference for cash creations when it comes to fund redemptions. Bloomberg’s senior ETF analyst Eric Balchunas revealed this development, highlighting BlackRock’s transition to a cash-only approach. Balchunas stated that the debate over redemption and creation methods for ETFs is essentially over, with cash creations taking precedence.
BlackRock Adheres to SEC’s Preferred Model
The revised proposal from BlackRock outlines cash creation and redemption mechanisms for its ETF, following the model advocated by the Securities and Exchange Commission (SEC). This shift comes after the SEC expressed concerns about investor safety and market manipulation in BlackRock’s initial proposal, which proposed an in-kind redemption model.
Pressure on Other Firms to Update Proposals
BlackRock joins other firms like Ark Invest and 21Shares in updating their ETF proposals to include cash creations. The SEC’s preference for cash redemptions is aimed at ensuring safety and accessibility for investors. While some firms have resisted this change, recent amendments suggest a shift towards cash creations across the industry.
Potential Approval in January
This move towards cash creation could pave the way for a potential approval of BlackRock’s Bitcoin ETF in January. Analyst Eric Balchunas believes that the industry is reaching a critical juncture before the holiday season, making it an opportune time for regulators to make a decision.
Hot Take: Cash Creations Mark a Turning Point for Bitcoin ETFs
The shift towards cash creations for Bitcoin ETFs represents a significant milestone in the industry. By aligning with the SEC’s preferred model, asset managers like BlackRock are addressing concerns about investor safety and market manipulation. While some firms have resisted this change, the move towards cash redemptions signals a consensus among industry players. As we approach January, there is growing anticipation for the SEC to approve multiple spot Bitcoin ETF applications. This development could open up new opportunities for investors and further mainstream adoption of cryptocurrencies.
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