BlackRock Revises Spot Bitcoin ETF Proposal Ahead of Hoped-for SEC Approval

BlackRock's ETF proposal now includes cash redemptions, a concession to the SEC that may improve the fund's approval odds.

AccessTimeIconDec 19, 2023 at 4:31 a.m. UTC
Updated Mar 8, 2024 at 6:52 p.m. UTC

On Monday, BlackRock (BLK) filed a revised spot bitcoin (BTC) exchange-traded fund (ETF) proposal in a bid to appease regulators, likely boosting its odds of securing a first-of-its-kind approval in the U.S.

Under the updated proposal, BlackRock’s ETF will feature cash creation and redemption mechanisms, the model favored by the Securities and Exchange Commission (SEC). The world’s largest asset manager is the latest of several firms to update its proposal amid speculation the SEC could approve a swath of spot bitcoin ETF applications as early as January.

BlackRock first applied for its iShares Blockchain and Tech ETF last month, proposing an in-kind redemption model.

However, the SEC scrutinized the proposal, raising concerns about investor safety and market manipulation. ETFs typically feature one of two types of redemption and creation mechanisms: In-kind or cash.

An in-kind redemption structure, which many firms say is more appealing to investors, enables firms to redeem shares for bitcoin held by their ETFs. Cash redemptions, which the SEC regards as the safer and more accessible redemption option, replace those shares with their equivalent cash value.

BlackRock is the latest of several firms to agree to issue cash redemptions until in-kind redemptions are approved. More than a dozen firms have filed ETF applications so far. ARK 21Shares has also published a revised S-1 with a similar change.

The SEC has delayed several other ETF applications by Grayscale, Ark 21shares, Vaneck and Hashdex.

UPDATE (Dec. 19, 04:55 UTC): Updated with additional context and information.

Edited by Sam Reynolds.


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Elizabeth Napolitano

Elizabeth Napolitano was a news reporter at CoinDesk.