BlackRock, a leading asset manager, has recently submitted a new amendment to the S-1 filing for its spot Bitcoin ETF, the iShares Bitcoin Trust. The amendment includes significant changes and updates, indicating the ongoing discussions and transactions between BlackRock and the U.S. Securities and Exchange Commission (SEC).
One notable update in the filing is the addition of a market ticker for the ETF, which is now listed as IBIT. This new information suggests that the fund intends to trade on the Nasdaq under this label. In the previous filing, the ticker field was left blank as a placeholder.
Furthermore, the recent amendment indicates a shift in the type of transactions involved. While earlier filings mentioned Bitcoin transactions, the latest filing states that the relevant transactions will now occur in exchange for cash. However, the possibility of Bitcoin transactions remains, as the amendment mentions that if Nasdaq receives the necessary regulatory approval, the trust may also perform in-kind creations and redemptions involving Bitcoin.
The updated filing also sheds light on the creation and redemption process of the iShares Bitcoin Trust. Previous amendments explained that shares would be issued and redeemed in blocks of 40,000, referred to as “baskets.” However, the latest amendment provides more clarity, suggesting that cash and in-kind creation and redemption models have been discussed in recent meetings with the SEC.
In addition, the amendment introduces the term “Directed Trade Model” for the first time. This term refers to the purchase, sale, or settlement of Bitcoin between the trust and various counterparties. These changes indicate BlackRock’s efforts to refine and optimize the creation and redemption process of the Bitcoin ETF.
Apart from the significant changes mentioned above, the latest amendment also includes other minor additions. One notable section clarifies that shares do not represent an interest in or obligations of the fund’s cash custodian (Bank of New York Mellon) and the Bitcoin custodian (Coinbase Custody). This clarification emphasizes the separation of responsibilities between different parties involved in the iShares Bitcoin Trust.
Furthermore, the amendment introduces a section that highlights the risks associated with the CF Benchmark Index, which determines the trust’s net asset value (NAV). It states that system failures and errors at CF Benchmarks Ltd. could lead to losses and costs borne by the trust and its shareholders. This disclosure underscores the importance of accurate and reliable benchmarking in maintaining the ETF’s value.
BlackRock, along with other asset managers, aims to offer the first spot Bitcoin ETF in the United States. Although the SEC has not approved its application yet, industry experts, such as Bloomberg ETF applicants Eric Balchunas and James Seyffart, believe that there is a high likelihood of approval by Jan. 10, 2024, estimating a 90% chance. This optimistic outlook reflects the growing interest and demand for regulated Bitcoin investment products.
BlackRock’s latest filing for the iShares Bitcoin Trust ETF demonstrates the company’s commitment to refining and improving its offering, while engaging in discussions with the SEC to address regulatory concerns. The inclusion of a market ticker, potential Bitcoin transactions, and enhanced creation and redemption models showcase BlackRock’s determination to provide investors with a secure and efficient way to gain exposure to Bitcoin through an ETF. As the regulatory landscape continues to evolve, the eventual approval of a Bitcoin ETF could mark a significant milestone in the mainstream adoption of cryptocurrencies.
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