BlackRock is making a bold move to get its spot Bitcoin exchange-traded fund (ETF) application approved by the Securities and Exchange Commission (SEC). The asset management giant has revised its model to enable participation from Wall Street banks like JPMorgan and Goldman Sachs.

Under the new "in-kind redemption prepay" structure, banks can act as authorized participants by transferring cash to a broker-dealer to purchase Bitcoin. This cash-for-crypto process circumvents restrictions preventing banks from holding Bitcoin directly.

Crucially, BlackRock says this revised ETF model offers "superior resistance to market manipulation" - a key reason why the SEC has rejected past Bitcoin ETF applications. By shifting risk away from authorized participants to market makers, the structure better protects investors.

BlackRock recently met with the SEC for the third time to discuss its Bitcoin ETF. The regulator has until March 15th to make a decision. If approved, the ETF would be a milestone for mainstream Bitcoin adoption by giving Wall Street giants a regulated avenue to gain exposure.

With major players like Fidelity, VanEck, and Galaxy Digital also vying for a Bitcoin ETF, the SEC is under pressure to finally approve one. BlackRock's model tweak may be what it takes to get the regulatory green light.