Key Takeaways:
- BlackRock will sponsor its own spot Bitcoin ETF launch.
- Experts believe the firm’s confidence is more noteworthy than the seeding itself.
- The not-yet-approved ETF already has a ticker and a CUSIP number.
YEREVAN (CoinChapter.com) — Investment Manager BlackRock stated its plans to provide initial “seed” funding for its spot Bitcoin ETF in its recent securities filings.
BlackRock’s S-1 Amendment Details
In detail, SEC Form S-1 is the initial registration form for new securities required of public companies based in the US. Companies usually file the S-1 before their initial public offering (IPO), providing details on the business model, the planned use of capital proceeds, etc.
Meanwhile, seeding an ETF is providing initial funding. Typically, a bank or a broker-dealer purchases the creation units (in this case, Bitcoin) in exchange for ETF shares, which can be traded in the open market on the launch day.
Scott Johnsson, an investor at Van Buren Capital, spotted the self-funding in BlackRock’s S-1 amendment, sharing an excerpt from the text.
“The Seed Capital Investor, an affiliate of the Sponsor […] purchased the Seed Creation Baskets,” read the text, which means that Blackrock will provide the seed funding for the ETF and assume all the risks as a “statutory underwriter.”
The confidence is more notable than the self-seeding
Eric Balchunas, the Senior ETF Analyst for Bloomberg, noted that the self-funding is not even the most curious part, as it does not ‘take much’ to launch an ETF. However, he pointed out that such proceedings are typical of a pre-launch state, in which the iShares ETF is not yet, at least officially.
Note: Seeding is typically not a lot of money just enough to get ETF going. So I wouldn’t read this as ‘Omg Blackrock is buying a ton of Bitcoin’ at all but more the fact they doing it and disclosing it shows another step in the process of launching.
he tweeted.
Moreover, the giant investment firm with over $9 trillion in assets under management already obtained a ‘CUSIP number.’ The latter is a unique nine-digit identification number assigned to securities traded on public markets in the US and Canada.
BlackRock and iShares’ Bitcoin spot ETF CUSIP number is 46438F101, as reflected in the Depository Trust & Clearing Corporation’s (DTCC) website.
According to the website, DTCC’s ETF processing automates the creation and redemption of ETF shares and their subsequent settlement with improved efficiencies and risk controls.
It looks like Blackrock has everything ready except the SEC approval.
The SEC has NOT Yet Approved a Spot Bitcoin ETF
To be clear, BlackRock does not yet have an official greenlight from the SEC to launch the Bitcoin spot ETF. Moreover, the investment firm is among several prominent companies currently seeking to launch a similar product that has not yet been approved on the US market.
Currently, the SEC’s desk filings include Fidelity, ARK Invest, VanEck, Invesco, etc. The agency has delayed the decision twice already, and the next round of deadlines falls mainly to January 2024.
Experts believe a spot ETF could be soon underway after Bitcoin investment vehicle Grayscale’s win in court against the SEC.
It is not yet clear how much adoption would the spot ETF contribute. However, BlackRock has over 500 approved ETFs over one denied launch, which raised Bitcoin investors’ spirits.
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