Asset manager BlackRock revealed its plan of seeding its spot bitcoin exchange-traded fund (ETF) on January 3rd with $10 million.
It recently had a total of six meetings with the US Securities and Exchange Commission (SEC) to discuss its application.
The company switched to a cash creation model for its investment product in response to the concerns of the securities regulator and dropped its initial plan of using the in-kind model.
The amendment
On Friday, the world’s largest asset manager filed an amendment to S-1, its registration statement for a spot bitcoin ETF.
The company disclosed that it was planning on seeding its iShares Bitcoin Trust on January 3rd, 2024 with a total of $10 million.
According to the amendment, the seed capital investor bought seed shares for the spot bitcoin ETF worth $100,000 on October 27th, with conditions applicable.
The filing also detailed the seed shares’ redemption for cash and the seed capital investor also bought seed creation baskets for $10 million.
James Seyffart, an analyst for Bloomberg, said on Friday that amended spot Bitcoin ETF application had been submitted by BlackRock after discussing with the SEC a day earlier.
He speculated that it could imply that the asset manager would launch its spot Bitcoin ETF not long after the seeding on January 3rd.
The analysts
Once the spot Bitcoin ETF is launched by the asset manager, it will trade under the ticker IBIT. Other analysts also commented on the seeding of the spot Bitcoin ETF.
Eric Balchunas, another Bloomberg analyst, said that given that the asset manager had seeded its ETF with $100,000 back in October, the decision to seed it with $10 million was a pretty big bump.
Balchunas also stated that authorized participants (APs) have to be named in the upcoming S-1 updates of the filing, as per the SEC.
The securities regulator has given a deadline of 10 days to submit them. He speculated that the SEC might approve applicants who have adopted the cash creation model and included the AP agreement.
The background
In the past month, BlackRock has had more meetings with the SEC than any other company that has applied to a spot Bitcoin ETF.
The meetings between the two took place on November 20th, November 28th, December 11th, December 14th, December 19th, and December 21st.
In December, the asset manager also filed three amendments to its spot Bitcoin ETF application. Initially, it had used an in-kind model for its ETF and had tried to seek the SEC’s approval.
However, it failed to persuade the securities regulator, so it decided to switch to the in-cash model for its spot Bitcoin ETF.
January 10th is the first deadline for the approval of a spot Bitcoin ETF and are anticipating that the SEC will approve several spot Bitcoin ETF applications on that date.
Mike Novogratz, the chief executive of Galaxy Digital, also expressed the same opinion about the SEC’s possibility of approving the investment product.