BlackRock recently filed an updated S-1 form for its proposed Bitcoin exchange-traded fund (ETF), the iShares Bitcoin Trust, revealing seed funding of $100,000.
In total, the company made 21 notable amendments on Dec. 4 to address various factors related to the Trust’s structure, operations, risks, and disclosures. These changes reflect BlackRock’s efforts to enhance the robustness of its offering and provide clarity to potential investors on issues like security, valuation, regulatory compliance, and risk management.
The amendments span critical topics such as custody arrangements, valuation policies, principal market determinations, indicative pricing, fork handling procedures, liability limitations, risk disclosures, and cash management protocols. They aim to fortify security measures for private keys and Bitcoin holdings, ensure reliable and transparent valuations, streamline operational processes between key entities like the Bitcoin Custodian and Prime Broker, and delineate contingency plans for disruptive events.
Additionally, the filing provides more details on regulatory considerations in major jurisdictions like the UK and EU, underscoring the complex and shifting landscape that Bitcoin ETFs must navigate. It also includes illustrative examples of potential regulatory impacts, like the SEC’s action against Ripple’s XRP token, to demonstrate tangible consequences for the cryptocurrency space.
Through these targeted updates, BlackRock seeks to demonstrate its commitment to creating a robust, compliant, and investor-friendly Bitcoin ETF product. The additional disclosures offer clarity into the risk management philosophy and governance standards that would underpin the Trust. However, the unpredictability of new regulations and Bitcoin’s inherent volatility remain key variables for this pioneering ETF attempt.
Below is a breakdown of the 21 major changes to the BlackRock ETF filing made on Dec. 4:
| Amendment | Amendment Summary |
|---|---|
| 1 | Details filled in regarding Seed Capital Investor’s initial $100,000 purchase of 4,000 Shares at $25 per share. Seed Shares will be later redeemed for cash, followed by additional undisclosed purchases forming Seed Creation Baskets. |
| 2 | Sponsor’s Fee may currently not be waived, but BlackRock pledges to notify shareholders of any future fee waivers. |
| 3 | All private keys the Bitcoin Custodian holds will now be kept in cold storage rather than a mix of hot and cold. |
| 4 | Trust’s Prime Broker Trading Balance holdings represent… |
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