BlackRock, a leading American asset management firm, is actively pursuing a novel redemption model for its iShares Bitcoin Trust (IBIT) ETF. The Nasdaq Stock Market LLC has submitted this in-kind redemption proposal to the U.S. Securities and Exchange Commission (SEC) for consideration.
What Changes Are Proposed in the Redemption Model?
The proposed rule seeks to amend Section 19(b)(1) of the Securities Exchange Act of 1934, allowing qualified participants to transfer Bitcoin assets from the fund directly. This alteration aims to streamline the redemption process.
How Might This Impact BlackRock’s Bitcoin ETF?
Should the SEC approve this in-kind model, authorized participants would have the option to redeem their investments in Bitcoin rather than cash. While this model suits various exchange-traded products, previous SEC chair Gary Gensler favored cash-based transactions during earlier deliberations.
BlackRock’s initiative follows its introduction of a Bitcoin ETF variant through CBOE in Canada. The company is making strategic moves on a global scale concerning Bitcoin ETF offerings. James Seyffart highlighted that the firm has applied for in-kind creation and redemption for Bitcoin ETFs, which could enhance the IBIT’s operational flexibility.
– Approval of the in-kind model could:
– Increase competitiveness in the Bitcoin ETF market.
– Provide investors with a wider array of redemption options.
– Signal a shift towards integrating cryptocurrency within established financial frameworks.
The potential approval of this model could significantly impact the market, presenting new opportunities for Bitcoin ETF investors. Future progress hinges on the SEC’s decision regarding BlackRock’s request, which may shape the broader regulatory landscape for cryptocurrency. Recently, IBIT saw a substantial influx of $155 million, contributing to a total of $517 million in ETF inflows over the span of several days.
