The company's proposal now includes a mechanism for redeeming shares for fiat money. This is a redemption model that the SEC considers safer for investors compared to redemption in BTC

BlackRock has updated its application for a spot Bitcoin ETF to improve its chances of approval by the US Securities and Exchange Commission (SEC). The management company's proposal now involves a mechanism for redemption of fund shares in fiat money - a model preferred by the American regulator.

The world's largest asset manager became the latest of several firms to update statements amid speculation that the SEC could approve a slew of Bitcoin ETF applications as soon as January. ARK Investments also previously made similar changes to its application to create the ARK 21SHARES Bitcoin ETF.

Why is a Bitcoin spot ETF so important?

Various ETFs, including gold, have trillions of dollars in assets under management. It is generally accepted in the cryptocurrency community that even a small percentage of this capital can have an impact on the global crypto market in the future. If spot Bitcoin ETFs are approved, the demand for cryptocurrency will increase: when buying shares of funds, it is implied the supply of Bitcoin as an underlying asset, that is, its direct purchase on the market, affecting the rate.

What is a Bitcoin ETF? How it works and how it affects the cryptocurrency market


BlackRock filed to launch the iShares Bitcoin Trust exchange-traded fund in June this year, proposing an in-kind redemption model (in Bitcoin). However, the US Securities and Exchange Commission, after analyzing this proposal, expressed concerns about investor safety and market manipulation, writes CoinDesk.

ETFs typically have one of two types of redemption and release mechanisms: in-kind or cash. The in-kind repurchase structure, which many companies believe is more attractive to investors, allows companies to repurchase units using Bitcoin. The SEC considers redemption for fiat money safer and more accessible.

In this case, if the investor wants to redeem the fund's shares, BlackRock will have to remove the bitcoins from the vault, sell them and pay the investor the required amount in fiat money.

“The trust issues and redeems blocks of 40 thousand shares on an ongoing basis. These transactions will be carried out in exchange for cash. Subject to regulatory approval, these transactions will also be able to be carried out in exchange for bitcoins,” BlackRock said in the new filing.

The company also indicated in the documents the ticker symbol for the fund being created. The spot Bitcoin ETF is expected to trade on NASDAQ under the name IBIT.

Other companies awaiting SEC approval include Valkyrie, Fidelity Investments, ARK Investments, Grayscale, WisdomTree and Invesco. Bitcoin ETF issuers have already progressed to key details in negotiations with the SEC. The deadline for the regulator to make a decision on whether to approve, reject or defer decisions on applications for Bitcoin ETFs is set for mid-January.