{"id":26831,"date":"2023-12-19T08:44:51","date_gmt":"2023-12-19T08:44:51","guid":{"rendered":"https:\/\/nftandcrypto-news.com\/crypto\/blackrock-ark-revise-bitcoin-etf-plans-along-secs-cash-only-model\/"},"modified":"2023-12-19T08:44:54","modified_gmt":"2023-12-19T08:44:54","slug":"blackrock-ark-revise-bitcoin-etf-plans-along-secs-cash-only-model","status":"publish","type":"post","link":"https:\/\/nftandcrypto-news.com\/crypto\/blackrock-ark-revise-bitcoin-etf-plans-along-secs-cash-only-model\/","title":{"rendered":"BlackRock, ARK revise Bitcoin ETF plans along SEC\u2019s cash-only model"},"content":{"rendered":"
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Major applicants for a spot Bitcoin (BTC) exchange-traded fund (ETF) in the United States are amending their filings to comply with the cash redemption model demanded by securities regulators.\u00a0<\/p>\n
Investment manager BlackRock and Cathie Wood\u2019s ARK Invest have updated their S-1 registration statements for a spot Bitcoin ETF with the U.S. Securities and Exchange Commission (SEC).<\/p>\n
Filed on Dec. 18, the S-1 amendments relate to the cash creation and redemption model for proposed spot Bitcoin ETFs, with BlackRock and ARK accepting the cash redemption system rather than in-kind redemptions, which imply non-monetary payments like BTC.<\/p>\n
ARK\u2019s registration statement hinted that its ARK 21Shares Bitcoin ETF would only allow cash creations and redemptions. The document mentioned \u201cpotential in-kind creation and redemption of shares,\u201d stating that the ETF may also permit authorized participants to create and redeem shares via in-kind transactions, subject to regulatory approval.<\/p>\n
BlackRock subsequently filed a similar update, stressing that in-kind transactions may take place but only subject to regulatory approval.<\/p>\n
\u201cThese transactions will take place in exchange for cash,\u201d BlackRock\u2019s iShares Bitcoin Trust ETF S-1 amendment reads, adding:<\/p>\n
\u201cSubject to the Nasdaq Stock Market receiving the necessary regulatory approval to permit the trust to create and redeem shares in-kind for Bitcoin, these transactions may also take place in exchange for Bitcoin.\u201d<\/p><\/blockquote>\n
According to Bloomberg ETF analyst Eric Balchunas, ARK and its ETF partner 21Shares did not want to do cash creations and even worked out a creative alternative method to do in-kind redemptions. \u201cSo if they surrender, that tells you SEC not budging, the debate is over, which is probably good if you are looking for January approval,\u201d the analyst wrote.<\/p>\n
The SEC\u2019s \u201ccash-only\u201d requirement means that the authorized participants (AP) will only be able to obtain more shares of the ETF by bringing the appropriate amount of cash to the table, according to investor and consultant Vance Harwood.<\/p>\n
Related: <\/em><\/strong>Spot Bitcoin ETF will be \u2018bloodbath\u2019 for crypto exchanges, analyst says<\/em><\/strong><\/p>\n
\u201cSome funds allow \u2018in-kind\u2019 creations too. For in-kind creations, the AP brings the asset that the ETF tracks and exchanges it for ETF shares. Apparently, the SEC is not keen on allowing this for spot Bitcoin ETFs,\u201d Harwood noted. He added that the SEC\u2019s position is \u201cunderstandable,\u201d stating:<\/p>\n
\u201cIt will make it clear where the ETF gets its underlying Bitcoin from \u2014 the ETF will buy them, presumably from reputable exchanges, whereas if you allowed in-kind transfers you wouldn’t be able to know where the Bitcoin transferred came from.\u201d<\/p><\/blockquote>\n
The global ETF provider WisdomTree also filed for an S-1 amendment to its spot Bitcoin ETF, the WisdomTree Bitcoin ETF, on Dec. 18, keeping the in-kind creation and redemption option.<\/p>\n
\u201cAuthorized participants, acting on the authority of the registered holder of shares, may surrender baskets in exchange for the corresponding amount of Bitcoin or cash,\u201d the registration statement reads, adding that APs may be able to create a basket or redeem through the in-kind option.<\/p>\n
Finance lawyer Scott Johnsson predicted in mid-December that ETF applicants would eventually have to bend their knee to using a cash creation and redemption model for their ETF. Previously, ETF applicants Invesco and Galaxy also updated their S-1 registration statements with the \u201ccash-only\u201d model.<\/p>\n
Magazine: <\/em><\/strong>Lawmakers\u2019 fear and doubt drives proposed crypto regulations in US<\/em><\/strong><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"
Major applicants for a spot Bitcoin (BTC) exchange-traded fund (ETF) in the United States are amending their filings to comply with the cash redemption model demanded by securities regulators.\u00a0 Investment manager BlackRock and Cathie Wood\u2019s ARK Invest have updated their S-1 registration statements for a spot Bitcoin ETF with the U.S. Securities and Exchange Commission […]<\/p>\n","protected":false},"author":1,"featured_media":26832,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","om_disable_all_campaigns":false,"footnotes":""},"categories":[42],"tags":[],"class_list":["post-26831","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-crypto"],"yoast_head":"\n
BlackRock, ARK revise Bitcoin ETF plans along SEC\u2019s cash-only model | NFT & Crypto News<\/title>\n\n\n\n\n\n\n\n\n\n\n\n\t\n\t\n\t\n\n\n\n\t\n\t\n\t\n