The U.S. Securities and Exchange Commission (SEC) has delayed its decision on whether to allow in-kind redemptions for BlackRock’s iShares Bitcoin Trust. In a new filing on Tuesday, the SEC invited public comments on the proposal, citing legal and policy concerns.
BlackRock introduced its Bitcoin ETF in January 2024, utilizing a cash redemption model. This approach implies that when investors sell, BlackRock has to convert Bitcoin to cash and remit the money.
If approved, the in-kind model would allow the fund to exchange Bitcoin for shares directly, thus increasing trading efficiency. Bloomberg analyst James Seyffart pointed out that such an arrangement could make ETFs more efficient in general.
Nasdaq had filed an updated rule change in January to support this new model. The SEC is now officially reviewing whether to approve or reject the change.
The delay is part of a broader trend. On the same day, the SEC also paused decisions on the Grayscale Litecoin and Solana Trusts and requested public feedback on the 21Shares Dogecoin ETF.
Since President Donald Trump took office in January, the SEC has taken a softer tone on crypto. Under new Chair Paul Atkins, the agency has dropped several lawsuits and is hosting public roundtables to reshape crypto regulation. Atkins outlined his vision for a more open approach on Monday.
The investors and crypto firms are keenly following these moves because they can determine the future of crypto ETFs in the U.S. The next few months may see significant changes in the way these digital assets are regulated and traded.
Also Read: When Will US SEC Approve In-Kind Crypto ETF Redemptions?
