BlackRock and Bitwise Amends Spot Bitcoin ETF Applications With SEC

BlackRock, one of the world’s largest asset management firms, has filed an amended S-1 with the Securities and Exchange Commission (SEC) for its proposed spot Bitcoin exchange-traded fund (ETF). This move mirrors similar actions taken by Bitwise. While the SEC has yet to approve a spot Bitcoin fund and has consistently delayed such applications, analysts speculate that ongoing discussions might be indicated by these recent developments.

In an intriguing twist, BlackRock received $100,000 in seed funding for its spot Bitcoin ETF in October 2023 from an undisclosed investor, as detailed in its latest SEC filing. The investor committed to acquiring 4,000 shares at $25.00 per share, acting as a statutory underwriter for the Seed Creation Baskets.

The filing also sheds light on BlackRock’s strategy for handling the sponsor’s fee. Rather than selling Bitcoin (the ETF asset) to cover fees, the asset manager plans to borrow Bitcoin or cash as trade credit on a short-term basis. This innovative approach aims to prevent a significant impact on Bitcoin’s price. 

The settlement of trade credits is set to occur on the business day following the execution date, incurring a financing fee of 11% plus the federal funds target rate divided by 365.

BlackRock was among the pioneers in filing for a spot Bitcoin ETF back in July. Currently, its application is one of 13 awaiting the SEC’s decision. Although the SEC has previously rejected similar applications, market experts anticipate that by early 2024, the regulatory body will likely approve the first spot Bitcoin ETF in the United States.

This development comes amidst a broader trend in the cryptocurrency space, with Bitcoin hitting new milestones. MicroStrategy, the business intelligence company led by CEO Michael Saylor, recently reported over $2 Billion in profits on its bitcoin holdings as the cryptocurrency surged past $42,000. 

Additionally, El Salvador’s President Nayib Bukele expressed satisfaction with his country’s investment in Bitcoin, declaring that El Salvador’s Bitcoin investments are now profitable.

As the cryptocurrency landscape continues to evolve, the prospect of Bitcoin ETFs gaining approval in the United States adds a new dimension to the market, attracting attention from institutional giants and investors alike.

ETF Trend Triggered After BlackRock’s Filing

BlackRock filed for a spot Bitcoin exchange-traded fund (ETF) application with the Securities and Exchange Commission (SEC) in June this year. In the following days, other traditional finance (TradFi) players including Invesco, WisdomTree, Valkyrie, Fidelity Investments, and several others joined the race. 

These entities also filed for a similar Bitcoin product with the SEC. After such giant players enter the crypto ETF domain, the broader crypto community is optimistic that the regulator might approve the much-awaited crypto products that give exposure to underlying crypto assets. 

Bitcoin price recently saw a notable surge in the last few days and hit $42,000, the price level last seen in May 2022. The price hike came as the result of optimism for potential BTC ETF approvals. 

Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.