BlackRock Receives $100,000 Seed Funding for Bitcoin ETF
BlackRock, the world’s largest asset manager, received $100,000 in seed funding from an undisclosed investor for its spot Bitcoin exchange-traded fund (ETF) in October 2023. This information was disclosed in BlackRock’s latest Securities and Exchange Commission filing. The investor agreed to purchase $100,000 worth of shares on October 27, 2023, at a price of $25.00 per share. This seed funding will enable the ETF to create and trade underlying shares in the open market.
Details on Sponsor’s Fee and Settlement of Trade Credits
BlackRock’s filing also revealed details about how the asset manager plans to pay the sponsor’s fee. They intend to borrow Bitcoin or cash as Trade Credit from the Trade Credit Lender on a short-term basis. This allows them to charge their fees via a loan instead of selling BTC, which helps avoid impacting BTC’s price significantly. The settlement of trade credits will occur on the business day following the execution date and will incur a financing fee based on the Fed Funds Target rate.
Implications for the Approval of Spot BTC ETFs
BlackRock was one of the first institutional giants to propose and file for a spot Bitcoin ETF in 2023. Their filing encouraged other institutions to do the same. Although most earlier filed spot BTC ETFs were rejected by the SEC before BlackRock’s entry into the race, experts predict that by early 2024, the SEC will likely approve the first spot BTC ETF in the United States.
Hot Take: Interesting Development in Crypto Space
The recent revelations regarding BlackRock’s seed funding and plans for paying fees have been described as an interesting development in the crypto space. This news highlights the growing interest of institutional giants like BlackRock in Bitcoin and the potential impact of ETFs on the cryptocurrency market.
By
By
By
