BlackRock files for spot Bitcoin ETF; Coinbase to serve as custodian for BTC holdings
BlackRock, one of the world’s largest asset managers, submitted plan Worked with the US Securities and Exchange Commission to create a Spot Bitcoin ETF through its iShares subsidiary.
The news comes after reports earlier in the day that the investment giant, which manages more than $9 trillion in assets, is close to filing for a Spot Bitcoin ETF.
Dubbed the iShares Bitcoin Trust, the spot ETF entity was launched on June 8 and aims to reflect the price performance of top-tier cryptocurrencies if approved.
According to the filing, the purpose of the trust is to “possess bitcoin transferred to the trust in exchange for shares issued by the trust,” and the trust’s assets consist primarily of bitcoin.
Coinbase as custodian
Coinbase Custody Trust Co. LLC will act as the custodian of the trust’s bitcoin holdings, and The Bank of New York Mellon will act as the custodian of the trust’s cash holdings.
Stocks issued by the ETF will be listed on the Nasdaq, but the stock has yet to be decided.
According to the filing, the ETF plans to issue and redeem shares only in blocks of 40,000 shares or integer multiples thereof, with blocks of 40,000 shares being named “baskets.”
These issuance and redemption transactions are conducted in exchange for Bitcoin and provide an ongoing basket with a net asset value per share of 40,000 shares on the date the basket creation or redemption order is accepted by the ETF.
The application did not disclose the number of Bitcoins deposited in the trust.
The proposed ETF is based on CF Benchmarks’ CME CF Bitcoin Reference Rate – New York Variant, a Kraken subsidiary and a UK Financial Conduct Authority licensed cryptocurrency index management company, according to a statement shared with It is said that it has been benchmarked by crypto slate.
According to a statement, CF Benchmarks obtains price data from cryptocurrency exchanges that adhere to “the highest possible standards of market integrity and transparency.”
CF Benchmarks CEO Sui Chung said:
“Currently, an estimated 20% of Americans own Bitcoin at some point. BlackRock’s proposed ETF could provide a more familiar and accessible option for the remaining 80%.” be.”
Risk disclosure
The filing lists certain risk factors associated with digital assets, which may have a “material adverse effect” on the value of the stock, resulting in the loss of all or substantially all of the stock’s value. including “extreme volatility” that could result in
BlackRock’s iShares Bitcoin Trust also noted in its filing that potential modifications to the Bitcoin network’s protocol and software could adversely affect investments in the trust, It also mentions the challenges of scaling the speed and volume of transactions on the network.
Additionally, the ETF noted in its application that a temporary or permanent fork could adversely affect the value of its shares, and that shareholders may not benefit from a fork or airdrop. also mentions.
In the case of a hard fork, the Trust will determine which network is better suited for its purpose, and that such a fork may change the source code, including the 21 million Bitcoin supply cap, to the Bitcoin network. pointing out.
Past spot ETFs failed to pass the SEC
Approval of spot bitcoin ETFs has been a controversial issue in the US, with the SEC rejecting all spot bitcoin ETF applications to date. However, regulators have given the green light to several Bitcoin futures ETFs.
The main reasons for the SEC’s reluctance to approve spot Bitcoin ETFs are: concern Issues of market manipulation and lack of oversight over many cryptocurrency exchanges.
Digital Currency Group subsidiary Grayscale Investments is currently embroiled in a legal battle with the SEC seeking to deny conversion of the Grayscale Bitcoin Trust to a spot Bitcoin ETF.
