LAST MINUTE: A New Update has Arrived from the SEC for the Much-Awaited Historical Feature in Bitcoin!

The Securities and Exchange Commission (SEC) of the USA has postponed BlackRock's request to transition to the "in-kind redemption" process for its spot Bitcoin ETF IBIT, which involves redemption with crypto assets instead of cash.

This structural change would allow authorized participants to buy and sell ETF shares directly with Bitcoin without using cash.

Currently, APs in crypto ETFs can only create and redeem ETF shares through cash. However, with the in-kind system, APs will be able to acquire ETF shares directly in exchange for Bitcoin or Ethereum, or redeem their shares with these cryptocurrencies. This method will not only provide tax advantages but also improve the accuracy of ETF pricing by reducing transaction time and costs.

BlackRock's IBIT fund is currently the largest spot Bitcoin ETF in terms of assets under management. Nasdaq had submitted a rule change request to the SEC for this structural transformation. This transformation could further enhance the appeal of IBIT for institutional investors.

In the event that the in-kind system is approved, investors will be able to benefit from the following advantages:

Lower Tax Burden: The direct use of crypto assets can reduce the tax burden by eliminating cash conversions and, consequently, taxable transactions.

Faster Transactions: Direct exchanges between ETF shares and cryptocurrencies can enhance transaction speed and efficiency.

More Accurate Pricing: The elimination of cash conversions allows ETF prices to be closer to the true market values of Bitcoin or Ethereum.

Lower Transaction Fees: Since there is no requirement to convert to dollars, transaction fees may decrease and liquidity may increase.