On Monday, BlackRock (BLK) filed a revised proposal for a spot Bitcoin (BTC) exchange-traded fund (ETF) in an attempt to appease regulators, which is likely to boost its chances of getting a first-of-its-kind approval in the US
Under the updated proposal, BlackRock’s ETF will have cash creation and redemption mechanisms, the model preferred by the Securities and Exchange Commission (SEC). The world’s largest asset manager is the latest of several companies to update its proposal amid speculation that the SEC could approve a series 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 reviewed the proposal and expressed concerns about investor safety and market manipulation. ETFs typically have one of two types of redemption and creation mechanisms: in-kind or cash.
An in-kind redemption structure, which many companies believe is more attractive to investors, allows companies to exchange shares held by their ETFs for Bitcoin. Cash redemptions, which the SEC considers to be the safer and more accessible redemption option, replace these shares with their equivalent cash value.
BlackRock is the latest of several companies to agree to conduct cash redemptions until in-kind redemptions are approved. So far, more than a dozen companies have submitted ETF applications. ARK 21Shares also released a revised S-1 with a similar change.
The SEC has delayed several Ether ETF applications from Grayscale, Ark 21shares, Vaneck and Hashdex.
UPDATE (December 19, 04:55 UTC): Updated with additional context and information.