BlackRock Files Updated Bitcoin ETF Proposal to Boost Approval Chances
BlackRock, the world’s largest asset manager, has filed an updated proposal for a spot Bitcoin exchange-traded fund (ETF) as rumors of SEC approval circulate. The revised proposal aims to address the SEC’s concerns and increase the likelihood of securing approval for the ETF in the US.
Revised Proposal Includes Cash Creation and Redemption Mechanisms
The updated proposal states that BlackRock’s ETF will incorporate cash creation and redemption mechanisms favored by the SEC. Initially, BlackRock had proposed an in-kind redemption model for its iShares Blockchain and Tech ETF. However, the SEC expressed concerns about investor safety and market manipulation, prompting BlackRock to make adjustments.
Types of Redemption and Creation Mechanisms for ETFs
ETFs typically offer either in-kind or cash redemption structures. In an in-kind redemption model, companies can redeem shares for Bitcoin held by their ETFs. Cash redemptions, preferred by the SEC, replace shares with their equivalent cash value.
BlackRock among Several Applicants Updating Bitcoin ETF Proposals
BlackRock is not alone in updating its proposal for a spot Bitcoin ETF. Valkyrie, Galaxy Digital, Invesco, and other applicants have also revised their filings. Speculation suggests that the SEC could approve multiple spot Bitcoin ETF applications as early as January 2024.
BlackRock Agrees to Exclude In-Kind Creations and Redemptions
To align with the SEC’s preference for cash redemptions, BlackRock’s updated filing indicates that the asset manager will exclude in-kind creations and redemptions for its Bitcoin ETF. However, the filing also suggests that BlackRock aims to facilitate in-kind creations in the future, pending regulatory approvals.
Positive Impact on the Market as Approval Anticipation Grows
BlackRock’s decision to prioritize cash creations in its updated filing is seen as a positive development. Following BlackRock, WisdomTree has also submitted an updated filing. These developments, along with the possibility of alignment between applicants and the SEC, have influenced the market, leading to a 5.5% price increase for Bitcoin.
Hot Take: BlackRock’s Revised Bitcoin ETF Proposal Boosts Market Confidence
The recent filing updates by BlackRock and other applicants for a Bitcoin ETF indicate a growing optimism and alignment with the SEC’s preferences. As anticipation of approval builds, the market has responded positively, with Bitcoin experiencing a significant price increase. This development signals increased confidence and potential market growth as the possibility of a spot Bitcoin ETF approval in the US becomes more likely.
By
By
By
By
By