© Reuters.
NEW YORK – BlackRock (NYSE:) and ARK Invest have adjusted their strategies for proposed cash exchange-traded funds (ETFs), aligning with the U.S. Securities and Exchange Commission’s (SEC) preference for cash transactions. The companies have updated their documents to reflect an all-cash model for creations and redemptions of the ETFs offered.
The move to an all-cash model is significant because it speaks to the efforts these investment giants are making to meet regulatory standards set by the SEC. Historically, the SEC has been cautious in approving securities based on cryptocurrencies, particularly those that could hold the actual assets, due to concerns about market manipulation and investor protection.
By moving to cash-only management, BlackRock and ARK Invest aim to address some of these regulatory concerns. This approach would mean that ETFs would not directly hold bitcoins, but would be priced based on the value of the cryptocurrency and would settle transactions in cash.
This development is part of a broader trend in the financial sector to integrate cryptocurrencies into traditional investment instruments. Approval of a Bitcoin spot ETF by the SEC would be seen as a milestone for the crypto market, potentially paving the way for increased institutional investment.
Both BlackRock and ARK Invest are well-known names in the investment world, with BlackRock being the world’s largest asset manager and ARK Invest being known for its focus on innovative technologies. Their revised ETF proposals demonstrate continued interest and confidence in the potential of cryptocurrencies as a legitimate asset class.
To date, the SEC has yet to approve a Bitcoin ETF in the United States, although several companies have submitted proposals. The decision regarding the revised proposals from BlackRock and ARK Invest is highly anticipated by investors and could have significant consequences for the cryptocurrency market.
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