BlackRock, the investment behemoth, has received a notable seed capital of $100,000 for its forthcoming bitcoin exchange-traded fund (ETF). This move, detailed in a recent application to the U.S. Securities and Exchange Commission (SEC), marks a pivotal moment in BlackRock’s cryptocurrency journey.
Details of the Seed Funding
An anonymous seed investor agreed to purchase $100,000 worth of shares on October 27, 2023. Following this agreement, the investor acquired 4,000 shares at a per-share price of $25.00. This seed capital is crucial as it underpins the creation units of the ETF, facilitating its offering and trading on the open market.
The iShares Bitcoin Trust Proposal
BlackRock’s proposed ETF, named the “iShares Bitcoin Trust,” aims to directly invest in bitcoin rather than futures linked to the cryptocurrency. This approach distinguishes it from other similar offerings and is currently one of the 13 applications awaiting SEC’s approval.
There is a strong market expectation for the SEC to approve one or more spot ETFs early next year. Analysts from Bloomberg estimate a 90% probability of approval as early as January.
BlackRock and Bitwise Update Their Filings
Both BlackRock and Bitwise have recently updated their S-1 filings with the SEC for their respective spot bitcoin ETFs. These updates suggest ongoing discussions with the regulator and reflect the efforts made by both the SEC and the issuers to resolve outstanding issues.
Enhanced Language and Compliance Measures
The revised BlackRock filing includes new measures for monitoring unusual price movements and enhanced language around anti-money laundering compliance. Additionally, it incorporates an audited statement from PricewaterhouseCoopers, ensuring higher transparency and reliability.
BlackRock’s Commitment to Compliance
A significant aspect of BlackRock’s updated filing is the emphasis on interacting only with verified third-party service providers. This commitment to due diligence ensures thorough Know Your Customer (KYC) processes with entities like Authorized Participants, Market Makers, Prime Brokers, and Bitcoin Custodians.
Market Response to the Potential Approval
The cryptocurrency market has responded positively to the speculation surrounding the SEC’s potential approval of a spot fund. Bitcoin, the world’s largest cryptocurrency by market capitalization, has seen a 20.6% surge over the past month, trading just under $42,000.
