BlackRock, one of the prominent asset managers in the financial industry, has submitted a new amendment to its S-1 filing for the iShares Bitcoin Trust – a spot Bitcoin ETF. This filing, made on December 18, brings several noteworthy changes and provides insights into recent discussions between BlackRock and the U.S. Securities and Exchange Commission (SEC). In this article, we will carefully analyze the latest amendment and its implications for the potential launch of the iShares Bitcoin Trust.
One significant addition in BlackRock’s latest filing is the inclusion of a market ticker for the iShares Bitcoin Trust. The previous filing utilized a blank field as a placeholder, but the new amendment introduces the ticker “IBIT” for the first time. This ticker indicates that the fund intends to trade on the Nasdaq exchange under this label, providing potential investors with a clear identification.
The amended filing also sheds light on the discussions between BlackRock and the SEC regarding creation and redemption models for the iShares Bitcoin Trust. The previous filings mentioned the issuance and redemption of shares in blocks of 40,000, referred to as “baskets.” While these transactions were initially described involving Bitcoin, the latest amendment states that cash will be the primary medium for relevant transactions. However, it is important to note that Bitcoin transactions still remain a possibility if the necessary regulatory approval is granted by Nasdaq. This highlights BlackRock’s flexibility in deciding whether to incorporate Bitcoin in the creation and redemption models.
The latest amendment introduces the term “Directed Trade Model” for the first time. This refers to the purchase, sale, or settlement of Bitcoin between the iShares Bitcoin Trust and different counterparties. The inclusion of this term suggests that BlackRock is paving the way for a structured and regulated framework for Bitcoin transactions within the fund.
Additionally, the amended filing includes some minor additions. One section clarifies that shares in the iShares Bitcoin Trust do not serve as interest in or obligations of the fund’s cash custodian, Bank of New York Mellon, or the Bitcoin custodian, Coinbase Custody. This distinction ensures that investors understand the limited liability associated with these parties. Another added section outlines the risks related to the CF Benchmark Index, which determines the trust’s net asset value (NAV). It highlights the potential losses and costs that the trust and its shareholders may face due to system failures or errors at CF Benchmarks Ltd.
BlackRock is not the only asset manager striving to launch the first spot Bitcoin ETF in the United States. However, experts in the ETF space, such as Eric Balchunas and James Seyffart, believe that there is a 90% chance of approval for a Bitcoin ETF by January 10, 2024. While the SEC has not yet approved BlackRock’s application, the continuous amendments and engagement between the asset manager and the regulatory body indicate the seriousness and potential prospects of the iShares Bitcoin Trust.
BlackRock’s latest amendment to the S-1 filing for the iShares Bitcoin Trust provides valuable insights into the company’s plans and discussions with the SEC. The inclusion of a market ticker, changes in creation and redemption models, introduction of the Directed Trade Model, and other additions demonstrate BlackRock’s commitment to navigating the regulatory landscape and offering a regulated Bitcoin ETF to institutional and retail investors. As the potential launch date approaches, investors and industry participants eagerly await the SEC’s decision and the subsequent impact on the cryptocurrency market.