BlackRock and WisdomTree Update Spot Bitcoin ETF: What Details Stand Out?

– Advertisement –

• The United States SEC’s approval of the cash redemption model for Bitcoin ETF, whether before or after the official approval, remains uncertain.
• Although the SEC is expected to approve all spot ETFs simultaneously, there is also the possibility of giving the green light to several potential parties.
• In the S-1 amendment application for the Spot Bitcoin ETF, WisdomTree still seems to maintain flexibility in creating and redeeming in-kind.

Investment giants BlackRock and WisdomTree have submitted another update for their spot Bitcoin ETF application in the United States.

BlackRock and WisdomTree Update Bitcoin ETF

On Monday, December 18, 2023, investment manager BlackRock submitted an amendment to form S-1 for the iShares Bitcoin Trust under the spot Bitcoin ETF application to the U.S. Securities and Exchange Commission (SEC).

Apparently, the current deadlock surrounding the approval of the spot Bitcoin ETF revolves around the redemption model behind the operations for ETF transactions. In line with this, BlackRock modified its form S-1 in its recent application. In the application, the investment manager leaves the ‘in-kind’ redemption section unapproved for SEC approval while approving the cash redemption system. It stated:

“These transactions will be in cash. Subject to regulatory approval, these transactions may also occur in Bitcoin.”

It is still unclear whether the SEC will approve the cash redemption model before or after the official approval of the Bitcoin ETF. The Commission is facing the next date for the approval of spot Bitcoin ETF applications until January 10, 2024. While the approval of all spot ETFs by the SEC is expected simultaneously, there is also the possibility of giving the green light to several potential parties. However, a single date that could grant firms permission to launch spot ETFs may also be provided.

WisdomTree Bitcoin ETF

In the S-1 amendment application for the Spot Bitcoin ETF, WisdomTree still seems to maintain flexibility in creating and redeeming in-kind. It stated that ETF baskets would only be issued or redeemed for a certain amount of Bitcoin or cash. “Shares will not be issued unless the Bitcoin or cash equivalent amount is allocated to the account of the Trust’s Custodian or Prime Broker.”

Previously, COINOTAG reported on Grayscale Investments’ stance on the tax consequences surrounding ETF redemptions and Grayscale Bitcoin Trust (GBTC) shareholders. The company stated that spot commodity ETFs are structured as grantor trusts, and thus, capital gains tax would not apply.