BlackRock Amends ETF Proposal with Cash Redemptions to Satisfy SEC, Boosting Approval Prospects

BlackRock has revised its spot bitcoin exchange-traded fund (ETF) proposal by introducing cash redemptions, a strategic move aimed at addressing SEC concerns and increasing the likelihood of securing regulatory approval.

The amended proposal aligns BlackRock with the SEC's preferred model for ETFs, featuring cash creation and redemption mechanisms. The adjustment comes in response to heightened speculation that the SEC could greenlight multiple spot bitcoin ETF applications as early as January. BlackRock's initial proposal, submitted last month for the iShares Blockchain and Tech ETF, proposed an in-kind redemption model. However, regulatory scrutiny prompted the asset management giant to pivot and adopt the SEC-preferred cash redemption structure. This move positions BlackRock among several firms modifying their proposals to align with SEC preferences, as the regulatory body evaluates a range of ETF applications. Notably, ARK 21Shares has also made a similar adjustment in its revised S-1 filing.

While the SEC has delayed decisions on ETF applications from various firms, including Grayscale, Ark 21Shares, Vaneck, and Hashdex, BlackRock's strategic amendment reflects the industry's collective effort to navigate regulatory expectations and enhance the prospects of securing ETF approvals.