Bitcoin ETF

Bitcoin

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 <p class="is-style-lead">BlackRock, the world’s largest asset manager, is finalizing its spot Bitcoin exchange-traded fund (ETF) application, aligning with US financial regulators’ preferences for ‘cash creations’ for fund <a rel="noopener noreferrer nofollow" title="redemptions" href="https://thebittimes.com/tag/redemptions.html">redemptions</a>.</p>
 <p>Bloomberg’s senior ETF analyst Eric Balchunas shed light on this development on Dec. 19, following BlackRock’s filing a day earlier.</p>
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    <p lang="en" dir="ltr">BlackRock has gone cash only. That’s basically a wrap. Debate over. In-kind will have to wait. It’s all about getting ducks in row bf holidays. Good sign. https://t.co/vgocs1aIwS</p>— Eric Balchunas (@EricBalchunas) December 19, 2023
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 <p>Balchunas highlighted BlackRock’s transition to a cash-only approach, signaling an end to the debate over the preferred method for ETF redemption and creation.</p>
 <p>“BlackRock has gone cash only. That’s basically a wrap. Debate over. In-kind will have to wait,” he stated.</p>
 <p>The revised <a rel="noopener noreferrer nofollow" title="proposal" href="https://thebittimes.com/tag/proposal.html">proposal</a> outlines cash creation and <a rel="noopener noreferrer nofollow" title="redemption" href="https://thebittimes.com/tag/redemption.html">redemption</a> mechanisms for BlackRock’s ETF, adhering to the model advocated by the Securities and Exchange Commission (SEC). Amid growing anticipation, BlackRock joins other firms in updating <a rel="noopener noreferrer nofollow" title="proposal" href="https://thebittimes.com/tag/proposal.html">proposal</a>s, with speculations about the SEC approving multiple spot bitcoin ETF applications as early as January.</p>
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 <p>BlackRock initially submitted its application for the iShares Blockchain and Tech ETF last month, proposing an in-kind redemption model. However, the SEC’s concerns regarding investor safety and market manipulation led to scrutiny of the proposal.</p>
 <p>ETFs generally offer two <a rel="noopener noreferrer nofollow" title="redemption" href="https://thebittimes.com/tag/redemption.html">redemption</a> and creation mechanisms: in-kind or cash.</p>
 <p>The in-kind structure allows firms to redeem shares for bitcoin held by their ETFs, avoiding market maker spreads and potential tax issues.</p>
 <p>In contrast, cash redemptions, preferred by the SEC for safety and accessibility, provide investors with the equivalent cash value of their shares, creating taxable transactions.</p>
 <p>Despite pressure from the SEC to amend applications to cash creations, ETF analyst James Seyffart noted that Wisdomtree’s recent filing amendment still allows for in-kind creation and <a rel="noopener noreferrer nofollow" title="redemption" href="https://thebittimes.com/tag/redemption.html">redemption</a>.</p>
 <p>Ark Invest and 21Shares adapted their filing to cash creation on Dec. 18, as Balchunas reported.</p>
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  <p>“I know for a fact ARK/21Shares did NOT want to do cash creations, even worked out a creative alternative way to do in-kind… so if they’re surrendering that tells you SEC not budging, debate is over.”</p> <cite>Eric Balchunas, senior ETF analyst at Bloomberg</cite>
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 <p>This shift towards cash creation might pave the way for a potential January approval of the ETF, according to Balchunas, as the industry reaches a critical juncture before the holiday season.</p>
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  </svg> <span class="cn-block-related-link__prefix"> Read more: </span> JPMorgan: Bitcoin ETF’s impact overstated, Ethereum set to surprise skeptics
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<p>Source: <a rel="noopener noreferrer nofollow" target="_blank" href="https://thebittimes.com/blackrock-pivots-to-cash-based-redemptions-in-spot-bitcoin-etf-proposal-tbt74128.html">https://thebittimes.com/blackrock-pivots-to-cash-based-redemptions-in-spot-bitcoin-etf-proposal-tbt74128.html</a></p>

BlackRock pivots to cash-based redemptions in spot Bitcoin ETF proposal

TheBitTimes

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