Blackrock (BLK) filed a revised proposal for a bitcoin (BTC) spot exchange-traded fund (ETF) on Monday in an effort to appease regulators, likely increasing its chances of securing a first-of-its-kind approval in the UNITED STATES.
Under the updated proposal, Blackrock’s ETF will feature liquidity creation and redemption mechanisms, the model favored by the Securities and Exchange Commission (SEC). The world’s largest asset manager is the latest of several companies to update its proposal as the SEC could approve a series of spot Bitcoin ETF applications as soon as January.
Blackrock filed its first application for its iShares Blockchain and Tech ETF last month, proposing an in-kind buyout model.
However, the SEC reviewed the proposal, raising concerns about investor safety and market manipulation. ETFs generally have one of two types of redemption and creation mechanisms: in-kind or cash.
An in-kind buyout structure, which many companies view as more attractive to investors, allows companies to buy back their shares for bitcoin held by their ETFs. Cash repurchases, which the SEC considers the safest and most accessible repurchase option, replace those shares with their equivalent cash value.
Blackrock is the latest of several companies to agree to issue cash buyouts until in-kind buyouts are approved. So far, more than a dozen companies have filed for ETFs. ARK 21Shares also issued a revised S-1 with a similar change.
The SEC has delayed several ETF applications from Grayscale, Ark 21shares, Vaneck and Hashdex.
UPDATE (December 19, 04:55 UTC): Updated with additional context and information.