BlackRock recently made changes to its spot bitcoin ETF application in favor of a cash creation and redemption model, as the Securities and Exchange Commission (SEC) appeared to prefer. The addendum also confirms that the iShares Bitcoin Trust ETF will be listed on the Nasdaq under the ticker IBIT.
BlackRock provides an update on its spot bitcoin ETF
Yesterday, Monday, December 18, BlackRock has updated its Bitcoin Spot ETF app through the S-1 Supplement.
Update: Amendment S-1 just dropped @Black stone for their place #Bitcoin AF pic.twitter.com/JxllvsRfab
— James Seyffart (@JSeyff) December 18, 2023
Amendments made through an S-1 generally include modifications to the structure of the ETF, changes to investment objectives, updates to ETF governance, or other important information. These changes may result from negotiations with the Securities and Exchange Commission (SEC) or ETF issuer’s internal review to reflect necessary adjustments or clarifications.
👉 Find our explainer article to understand everything about Bitcoin ETFs
In this case, we can keep 2 important pieces of information from this modification. First, BlackRock appears to favor a cash generation and cash buyback model (cash generation and buyback), which is what the SEC seemed to want, according to various analysts. However, the door remains open for a natural model, but that remains extremely unlikely, according to Eric Balchunas, an analyst at Bloomberg Intelligence.
If you wish to purchase units of this ETF, authorized participants (APs), such as licensed brokers, acquire these shares using cash rather than bitcoins. In exchange for this money, new shares are issued, expanding the ETF’s investor base.
Symmetrically, in the event of a resale, the buyback process comes into play. Instead of receiving bitcoins in exchange for their shares, investors receive an equivalent amount in cash.
This simplifies the transaction process and provides investors with flexibility while tying the value of the Bitcoin spot ETF to the underlying value of Bitcoin. Ultimately, it is BlackRock who is responsible for buying the bitcoins that underlie the ETF, which are hosted by an administrator, in this case Coinbase. But the BTC in question belongs to both BlackRock and the investors who bought shares of the Bitcoin ETF.
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IBIT: this will be the ticker of BlackRock’s spot BTC ETF
The document also confirms to us that the iShares Bitcoin Trust ETF is carried by BlackRock will be offered under the ticker IBIT on the Nasdaq exchange.
There are only 3 weeks left before the SEC has to make a final decision on the first-to-file Bitcoin Spot ETF from Ark Invest & 21Shares. While 13 entities have already competed in the ETF race, Crypto-focused fund manager 7RCC has just filed with Gemini to be appointed as administrator.
Important place of bitcoin ETF calendar dates
Ark Invest & 21Shares and Wisdom Tree have also filed S-1 amendment documents with the SEC regarding their own Bitcoin ETF application, most likely after discussions with the regulator.
👉 On the Same Topic – Bitcoin ETF: CEO VanEck Predicts BTC Price to Surpass $69,000 in 2024
Dialogue perceived positively by various observers, who see this as a reason for the simultaneous acceptance of many ETFs by the SEC.
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Passionate about the world of decentralized finance and the new developments brought about by Web 3.0, I write articles for Cryptoast that help make blockchain more accessible to everyone. Convinced that cryptocurrencies will change the future very soon.
Maximilien Prue
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