Coinspeaker
BlackRock Sets Stage for Bitcoin ETF with Seed Funding
BlackRock Inc (NYSE: BLK), one of the world’s largest asset managers, recently made headlines by announcing its plans to provide initial “seed” funding for its spot Bitcoin Exchange Traded Fund (ETF).
This strategic move was revealed in its recent securities filings, specifically through the SEC Form S-1, which is the initial registration form required for new securities by public companies based in the United States.
BlackRock’s Ambitious Move
Seeding an ETF, in this context, refers to providing the initial funding required for its launch. Typically, a bank or broker-dealer purchases the creation units (in this case, Bitcoin) in exchange for ETF shares. These shares can then be traded on the open market on the ETF’s launch day.
One of the intriguing aspects of this development is that BlackRock intends to self-fund its Bitcoin spot ETF. Scott Johnsson, an investor at Van Buren Capital, discovered this self-funding approach in BlackRock’s S-1 amendment and shared a relevant excerpt. This revelation indicates that BlackRock is willing to assume all the risks as a “statutory underwriter” in the creation of the ETF.
However, Eric Balchunas, Senior ETF Analyst for Bloomberg, pointed out that while self-funding is not unusual, it does signify that BlackRock is actively progressing towards the launch of its Bitcoin ETF. He emphasized that seeding, in this context, usually involves a modest amount of money, enough to initiate the ETF. It does not necessarily imply that BlackRock is accumulating a significant amount of Bitcoin.
BlackRock’s iShares Bitcoin Trust Moves Closer to Reality
Furthermore, BlackRock has taken an important step forward by obtaining a CUSIP (Committee on Uniform Security Identification Procedures) number for its iShares Bitcoin spot ETF. This unique nine-digit identification number is a must for securities traded on public markets in the United States and Canada
The CUSIP number for BlackRock and iShares’ Bitcoin spot ETF is 46438F101, and it is listed on the Depository Trust & Clearing Corporation’s (DTCC) website. The DTCC is a vital player in the ETF market, offering automated processes for the creation and redemption of ETF shares, as well as streamlined settlement procedures, with an emphasis on enhancing efficiency and risk management.
While these developments are noteworthy, it’s essential to clarify that BlackRock has not yet received official approval from the SEC to launch its Bitcoin spot ETF. The SEC is currently reviewing applications from several prominent companies, including Fidelity Investments, ARK Invest, VanEck, Invesco, and others, who are all eager to bring similar products to the U.S. market.
The SEC has already delayed its decision on these ETF applications twice, with the next round of deadlines mainly set for January 2024. The potential approval of a Bitcoin spot ETF has generated significant anticipation in the crypto space, particularly after the recent victory of Grayscale’s Bitcoin investment vehicle in a legal battle against the SEC.
next
BlackRock Sets Stage for Bitcoin ETF with Seed Funding