PANews reported on February 7 that according to The Block, the U.S. Securities and Exchange Commission (SEC) is considering a proposal that would change BlackRock's spot Bitcoin ETF to allow physical redemptions. In a document released on Thursday, the SEC acknowledged the proposal and requested comments within 21 days of its document being published in the Federal Register. According to the document, the SEC can then decide to approve, reject or "start a procedure."

According to a Form 19b-4 filing, Nasdaq last month issued an amended rule filing on behalf of BlackRock that would allow for physical redemptions and creations for the iShares Bitcoin Trust. More than a year ago, when the SEC was considering whether to approve a spot Bitcoin ETF, the companies were working out the technical details of how the redemption process for the product would work. The SEC favored a cash model that would require BlackRock to move Bitcoin out of storage, sell it immediately, and then return the cash to investors. The SEC later approved BlackRock's spot ETF proposal, along with other proposals, in January 2024.

James Seyffart, ETF analyst at Bloomberg Intelligence, said in a post on the X platform that changes to the redemption and creation process do not mean individual investors will be able to conduct physical transactions, only authorized participants.