BlackRock Bitcoin ETF In Active Discussions With SEC For Possible Launch

Key Points:

• BlackRock is in discussions with the SEC about the BlackRock Bitcoin ETF application, specifically focusing on the redemption model—cash or in-kind.
• The SEC is advising exchanges to opt for cash redemptions rather than in-kind for spot Bitcoin ETFs.

In recent developments, Bloomberg ETF analyst James Seyffart has revealed that BlackRock, a prominent investment management firm, held discussions with officials from the United States Securities and Exchange Commission (SEC) regarding the BlackRock Bitcoin ETF application.

The Dialogue with SEC: Shaping the Future of BlackRock Bitcoin ETF

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.

Key Developments in the Bitcoin ETF Landscape

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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