BlackRock and the SEC have clarified the language regarding the mechanism for the creation and redemption of a spot Bitcoin ETF, which will be used by the fund if approved by the regulator.
According to updates to the S-1 filing on the future mechanism for the creation and redemption of a Bitcoin spot ETF, the US Securities and Exchange Commission (SEC) and one of the world’s largest investment funds BlackRock have reached an interim agreement on the redemption model of the new financial instrument.
BlackRock’s proposed Bitcoin spot ETF received the stock ticker IBIT. If IBIT is approved, the SEC will insist on adopting a basic cash repayment model and only allow “in-kind” repayments in special cases.
According to BlackRock experts, the in-kind repayment model will provide asset managers with greater flexibility in managing their portfolio. However, the SEC prefers a model that would require BlackRock to mandatory sell bitcoins during the buyback and compensate investors in cash.
Earlier, Bloombergreportedthat since the beginning of December, representatives of BlackRock, Grayscale, Franklin and Fidelity have been actively involved in the negotiation process with the SEC regarding the conditions for the future launch of Bitcoin ETFs .
