BlackRock's proposed bitcoin ETF will now allow cash redemptions after pushback from the SEC
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- BlackRock has amended its proposed bitcoin spot ETF to issue cash redemptions, a filing shows.
- This is more in line with what the SEC prefers, instead of in-kind redemption models.
- The latest filing also premiered the potential ETF's ticker: IBIT
BlackRock updated its proposed bitcoin spot ETF to allow cash redemptions, bringing the fund more in line with regulatory demands.
According to an amended S-1 filing on Monday, the world's largest asset manager has agreed to put aside its preferred in-kind redemption mechanism for the time being and instead offer investors cash creation and redemption.
BlackRock previously filed for the ETF to offer in-kind redemptions, which would allow investors to redeem their fund shares for the bitcoin held within the investment vehicle. Under the SEC-sanctioned cash model, the firm will effectively have to convert the crypto asset into cash when returning shares to investors.
But BlackRock isn't giving up hope that in-kind redemptions won't be made available down the road.
"The Trust issues and redeems baskets on a continuous basis. These transactions will take place in exchange for cash," it wrote in the filing. "Subject to the in-kind regulatory approval, these transactions may also take place in exchange for bitcoin."
According to The Block, SEC officials have been meeting with firms, such as BlackRock and Fidelity, to discuss how redemptions may proceed on a spot bitcoin ETF.
The two firms have been joined by others in proposing such ETFs this year, which analysts have argued will open the crypto sector to more traditional Wall Street investors.
Although the regulator has yet to approve any of the proposed funds, BlackRock was preceded by other firms in amending the redemption procedure, such as Ark 21Shares and WisdomTree
The S-1 filing also gave investors their first glimpse of the BlackRock ETF's potential ticker: "IBIT," an abbreviation for the iShares Bitcoin Trust ETF.