SEC Shakes Up Crypto Markets: BlackRock’s Bitcoin ETF Inches Closer to In-Kind Redemptions
SEC Advances BlackRock’s Bid to Transform Bitcoin ETF with In-Kind Redemptions – Here’s What Comes Next
The U.S. Securities and Exchange Commission (SEC) has taken a critical step toward potentially reshaping the landscape of Bitcoin ETFs, signaling it may allow BlackRock’s $20 billion iShares Bitcoin Trust (IBIT) to adopt in-kind redemptions. This pivotal move, outlined in a Thursday filing, opens a 21-day public comment period before the agency decides whether to approve, reject, or extend its review of the proposal.
Why It Matters:
The U.S. Securities and Exchange Commission (SEC) has taken a critical step toward potentially reshaping the landscape of Bitcoin ETFs, signaling it may allow BlackRock’s $20 billion iShares Bitcoin Trust (IBIT) to adopt in-kind redemptions. This pivotal move, outlined in a Thursday filing, opens a 21-day public comment period before the agency decides whether to approve, reject, or extend its review of the proposal, according to the filing.
Behind the Scenes:
- Institutional Edge: If approved, the change would streamline trading for major players like hedge funds and market makers, reducing friction and potentially tightening the gap between Bitcoin’s market price and ETF NAV.
- Retail Impact? While everyday investors won’t handle Bitcoin directly, Bloomberg Intelligence’s James Seyffart notes improved liquidity and lower fees could trickle down. “This isn’t about retail—it’s about making the plumbing work better for big players,” he tweeted.
- SEC’s Balancing Act: The agency’s initial cash-only mandate aimed to prevent fraud and manipulation. Allowing in-kind redemptions suggests growing confidence in market safeguards, though skeptics warn it could expose ETFs to custody risks.
Market Reactions:
The news has reignited bullish sentiment in crypto circles, with Bitcoin briefly surging past $63,000 following the filing. Analysts speculate that approval could funnel billions more into IBIT, which is already the largest spot Bitcoin ETF, with over $16 billion in assets.
“This is about maturing the product for long-term adoption,” said a Nasdaq spokesperson.
What’s Next:
The SEC’s decision, expected by late June, could set a precedent for rivals like Fidelity and Grayscale to follow suit. A green light would signal regulators’ evolving comfort with crypto’s infrastructure—and hand BlackRock a strategic advantage in the ETF arms race.
Stay tuned as the 21-day comment period kicks off, shaping what could become Wall Street’s most crypto-friendly pivot yet.
