The largest asset manager, BlackRock, has made an update on its proposed Bitcoin spot ETF. The update suggests that they should allow cash redemption which aligns more with the regulatory demands. BlackRock has been trying to acquire Bitcoin spot ETF since May this year. According to the S-1 Filing amended on Monday, Blackrock has decided to shift its attention towards cash creation and redemption, which the SEC favors and pends the in-kind redemption for a little while.
“The trust issues and redeems baskets continuously,” BlackRock’s iShares Bitcoin Trust said in a regulatory filing. “These transactions will take place in exchange for cash. Subject to the in-kind regulatory approval, these transactions may also take place in exchange for bitcoin.
Initially, BlackRock had filled the ETF in-kind redemption, this would allow the asset managers to convert the crypto asset into cash when returning its shares to investors. In-kind redemption would allow its investors to redeem the funds for the Bitcoin held by the firm. This was to happen if only the SEC would approve this. But, BlackRock on the other hand is not giving up on this dream. They are certain that the SEC will allow in-kind redemption.
The SEC has been melting spot Bitcoin ETF that heavyweight institutions have been filling, the SEC stated that BlackRock fillings on ETFs are not clear and detailed. The SEC is set to approve several Spot Bitcoin ETFs in January, BlackRock is among the institutions that are currently updating their fillings. This week on Monday, Bloombereg’s senior ETF analyst stated that BlackRock has shifted to cash only. He typed on his Twitter account that “BlackRock has gone cash only. That’s a wrap. Debate over. In-kind will have to wait,”
Why is BlackRock Scrambling for ETF Approval?
BlackRock is scrambling for ETF approval may offer investment opportunities to investors. Additionally, it creates a competition and investment vehicle from other Bitcoin investment options like Grayscale Bitcoin Trust. Moreover, ETFs are investment products that allow investors to be exposed to Bitcoin and other cryptocurrencies without directly owning them. Therefore, Bitcoin spot ETFs are not affected by the volatility that Bitcoin and other cryptocurrencies face.
Also, BlackRock scrambling for ETF approval will ensure them to prevent market manipulation. Thus, scrambling for approval will ensure that the price tracking is bettered and fees are lowered. Compared to its competitors like Grayscale, their services come with higher charges of up to 95 basis points and 2% fee charges. BlackRock ETF approval will ensure that investors are provided with better tracking of Bitcoin value and affordable investment options.