BlackRock’s Bitcoin ETF Ticker IBIT Confirmed
BlackRock’s proposed Bitcoin exchange-traded fund (ETF) has been given the ticker symbol IBIT, according to a filing with the Securities and Exchange Commission (SEC). The filing also revealed that BlackRock will use a cash redemption model for its Bitcoin ETF, indicating a shift from its initial plan of an in-kind redemption model. This decision aligns with the SEC’s preference for cash transactions. Under the cash redemption model, investors will use cash to buy and sell Bitcoin ETF shares, rather than exchanging them directly for Bitcoin. This approach differs from the previously proposed in-kind model.
ARK Invest and 21Shares Also Adopt Cash Redemption Model
Following BlackRock’s lead, ARK Invest and 21Shares have also amended their filings to accept the SEC’s requirement of a cash redemption model for their spot Bitcoin ETFs. This change applies at least during the early stage of issuing the ETFs. Meanwhile, the SEC has delayed its decision on ARK Invest and 21Shares’ spot Ethereum ETF applications, which were originally due by December 26. The final decision is now expected in May 2024.
Hot Take: Shift Towards Cash Redemption Model
BlackRock’s decision to adopt a cash redemption model for its Bitcoin ETF, along with similar moves by ARK Invest and 21Shares, indicates a significant shift within the industry. The SEC’s preference for cash transactions is seen as a positive sign for regulatory approval. While this change may disappoint some investors who were hoping for an in-kind redemption model, it aligns with regulators’ concerns about custody and liquidity issues associated with direct exchanges of Bitcoin. Ultimately, this shift towards cash redemption could pave the way for greater acceptance and adoption of Bitcoin ETFs in mainstream finance.
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