Updates to the S-1 filing have provided further information on the future creation and redemption mechanism for a Bitcoin spot ETF. The US Securities and Exchange Commission (SEC) and BlackRock, one of the largest investment funds in the world, have reached an interim agreement regarding the redemption model for this new financial instrument.
BlackRock’s Bitcoin Spot ETF has been assigned the stock ticker IBIT. If IBIT is approved, the SEC will require the implementation of a basic cash redemption model and will only permit “in-kind” redemptions in certain exceptional cases.
According to experts at BlackRock, the in-kind redemption model will grant asset managers greater flexibility in their portfolio management. However, the SEC favors a model where BlackRock is obligated to sell bitcoins during the buyback and compensate investors in cash.
Earlier, Bloomberg reported that representatives from BlackRock, Grayscale, Franklin, and Fidelity have been actively engaged in negotiations with the SEC since the start of December. These negotiations revolve around the conditions for the future launch of Bitcoin ETFs.