Key Points:
The focus of these conversations revolves around the critical choice between the cash model summary and the in-kind redemption model for the impending BlackRock Bitcoin ETF offering. Eric Balchunas, a renowned analyst, disclosed that the SEC’s Trading & Markets engaged with exchanges on spot Bitcoin ETF 19b-4s, expressing a preference for cash creation over in-kind and requesting amendments within the next few weeks.
Simultaneously, Grayscale, another major investment management firm, reportedly met with the SEC’s division of trading and markets to discuss the approval or denial of 19b-4, a form crucial for proposing a rule change.
BlackRock appears to be collaborating with the SEC to determine the share-redemption structure for its proposed product. BlackRock Bitcoin ETF redemption typically takes two forms: “in kind,” where shares are redeemed for Bitcoin, or “cash,” where equivalent cash replaces the redemption.
Seyffart shared a document from BlackRock outlining redemption models, indicating a preference for the in-kind model. He emphasized in a tweet that this choice presents the cleanest structure for both BlackRock and its end investors.
While reports suggest disagreements between BlackRock and the SEC over details of the pending ETF product, the ongoing dialogue indicates progress toward approval. Despite potential differences, the engagement between the parties signifies a concerted effort to finalize crucial details, bringing the approval of the Bitcoin ETF one step closer.
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