Investment manager Blackrock recently submitted an amendment to the form S-1 for its iShares Bitcoin Trust, as it seeks approval for a spot Bitcoin ETF from the SEC. The main issue causing the delay in approving spot Bitcoin ETFs is the redemption model. Blackrock’s latest filing confirmed the cash redemption system but left the “in-kind” redemptions unconfirmed, pending approval from the SEC. The SEC has a deadline before January 10, 2024, to approve spot Bitcoin ETF filings. While it is expected to approve all the filings at once, it may give approval in batches or on a singular date for firms to launch their spot ETFs.
WisdomTree, another company seeking approval for a spot Bitcoin ETF, has left open the option for in-kind creation and redemption in its filing. It stated that ETF baskets would be issued or redeemed in exchange for Bitcoin or cash. Grayscale Investments also discussed ETF redemptions and tax implications for its Grayscale Bitcoin Trust shareholders, noting that capital gains tax would not apply to spot commodity ETFs structured as grantor trusts.
Hot Take: Progress Made but Hurdles Remain for Spot Bitcoin ETF Approval
Despite recent filings and amendments by Blackrock and WisdomTree, the approval of spot Bitcoin ETFs still faces hurdles. The SEC’s decision on whether to approve the cash redemption model or require in-kind redemptions remains uncertain. The upcoming deadline adds pressure to the situation, but it is unclear whether all filings will be approved simultaneously or in batches. The industry eagerly awaits further updates from the SEC regarding the launch of spot Bitcoin ETFs.
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