Blackrock Reveals Plan to Seed Spot Bitcoin ETF With $10 Million on January 3

Blackrock Reveals Plan to Seed Spot Bitcoin ETF With $10 Million on January 3 – BlackRock has unveiled its strategy to initiate a spot bitcoin exchange-traded fund (ETF) by investing $10 million on January 3. The asset management giant, in response to six recent meetings with the U.S. Securities and Exchange Commission (SEC) addressing concerns, has opted for a cash creation model instead of its initial preference for the in-kind model. 

The filing amendment (S-1) for the Ishares Bitcoin Trust was submitted by BlackRock, the world’s largest asset manager, to the SEC on Friday. The amendment specifies that the seed capital investor, affiliated with the trust’s sponsor, acquired seed shares valued at $100,000 for the spot bitcoin ETF on October 27, contingent upon certain conditions. 

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Additionally, the filing delineates the redemption of seed shares for cash and the acquisition of seed creation baskets amounting to $10 million by the seed capital investor on January 3, 2024. On Friday, Bloomberg analyst James Seyffart commented on the social media platform X that BlackRock has filed a revised S-1 form after engaging in discussions with the SEC the preceding day regarding its filing for a spot bitcoin ETF.

The analyst wrote: “Looking like Blackrock is planning to make moves on Jan 3rd. They’re seeding the ETF with $10 million.” He goes on to suggest that this may indicate BlackRock anticipates launching its spot bitcoin ETF “soon after.” Upon its launch, the Ishares Bitcoin Trust is set to be traded under the ticker IBIT.

Meanwhile, Bloomberg analyst Eric Balchunas expressed on X that BlackRock’s plan to seed its spot bitcoin ETF with $10 million on January 3 is a substantial increase compared to the $100,000 the asset manager invested in October. Balchunas emphasized that the SEC is requesting filers to name authorized participants (APs) in their upcoming S-1 updates, providing a 10-day window for submission. 

The analyst speculates that the securities regulator intends to favor applicants who incorporate the AP agreement in their amended filings and adopt the cash creation model. He stated on X: “This is no easy last step, and may keep some from starting gate. AP agreement + cash creates = approval.” BlackRock has engaged in more meetings with the SEC in the past month compared to other applicants for spot bitcoin ETFs. 

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The asset manager held discussions with the SEC on Nov. 20, Nov. 28, Dec. 11, Dec. 14, Dec. 19, and Dec. 21. Additionally, BlackRock submitted three amendments to its spot bitcoin ETF filing in December. Initially, the world’s largest asset manager sought approval from the securities regulator for employing an in-kind method. 

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Unable to convince the SEC with a revised in-kind model, BlackRock decided to adopt the cash model for its spot bitcoin ETF. The deadline for the first spot bitcoin ETF approval is Jan. 10, and there’s anticipation, shared by Galaxy Digital CEO Mike Novogratz, that the SEC may approve multiple spot bitcoin ETFs by that date.

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