BlackRock has met with the SEC regarding their proposed spot bitcoin ETF product, known as the iShares Bitcoin Trust, according to a memorandum from the financial regulatory body.
A memo released by the SEC on November 20 revealed that BlackRock offered two potential redemption models for its iShares Bitcoin Trust, which include in-kind transactions and using cash.
However, the memo from the SEC did not reveal the regulator's response to BlackRock's proposed redemption models.
Representatives from BlackRock and Nasdaq were present at the meeting where they had a lengthy discussion with the United States Securities and Exchange Commission (SEC) concerning the possibility of listing the spot Bitcoin exchange-traded fund (ETF).
There is an increase in speculation that the SEC may be close to approving a spot Bitcoin ETF for the United States markets.
On the other hand, uncertainty surrounds the SEC's response and the likelihood of approval, given the long history of delays and rejections in the area.
BlackRock is among numerous firms that have submitted applications for spot crypto ETFs, and are awaiting approval from the SEC. Notable applicants include WisdomTree, Fidelity, Invesco Galaxy, VanEck, Valkyrie, and Bitwise.
Remember, in June, BlackRock submitted its initial application for a spot Bitcoin ETF listing on the Nasdaq stock exchange. Meanwhile, the outcome of the meeting and the decision by the SEC regarding a spot Bitcoin ETF are being monitored by news agencies, the cryptocurrency industry, and investors.
The approval of a spot Bitcoin ETF offers several advantages to the cryptocurrency industry. Firstly, the regulatory oversight of this ETF under the jurisdiction of the SEC could contribute to bitcoin's credibility.
Furthermore, the accessibility of ETFs to the public could facilitate more widespread bitcoin investment. The role of the SEC in upholding rigorous standards is a factor that would enhance investor protection.
Besides, the approval of a spot Bitcoin ETF holds the potential for substantial investments from mutual funds and pensions, potentially directing billions into the cryptocurrency market. This will foster institutional adoption.
From all indications, BlackRock is working with the SEC to figure out the share-redemption structure of its proposed product.
Typically, ETF redemption takes two forms: either "in-kind" or "cash." An in-kind redemption structure essentially means that BlackRock could redeem shares for Bitcoin held by the ETF. While a cash redemption structure could replace that with equivalent cash.
By relying on in-kind redemption for its spot bitcoin ETF, BlackRock seeks to create a product that is more appealing to investors. However, it is likely being challenged by the SEC.
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