BlackRock to Initiate $10 Million Investment in Bitcoin ETF on January 3, 2024
The buzz surrounding the approval of a spot Bitcoin ETF has reached a fever pitch, with a frenzy of marketing activity. However, BlackRock seems to be taking a different approach. Instead of aggressive advertising, the company is focused on ensuring a smooth and substantial launch for its ETF, as indicated in its recent filing. BlackRock has updated its Bitcoin ETF application following a meeting with the SEC and other applicants, as the anticipated approval date of January 10 draws near.
In line with this approach, several companies, including BlackRock, Hashdex, and Pando Asset, have submitted updated presentations and revised S-1 filings on December 22. BlackRock’s application reveals that the “seed creation basket” will be launched on January 3, 2024. This term refers to the initial batch of assets or securities traded for ETF shares during the fund’s creation. It is a crucial step in establishing a new ETF.
In a groundbreaking move, BlackRock plans to seed its spot Bitcoin ETF with $10 million in cash on January 3, 2024, just days before the expected approval by the SEC. This significant increase from their previous seeding of $100,000 in October, as outlined in their latest prospectus, indicates BlackRock’s strategic response to the ongoing marketing competition.
While Bitwise and Hashdex are diving into consumer-facing advertisements for their spot Bitcoin ETFs, BlackRock is taking a different approach. Instead of flashy ads, they are focusing on something fundamental: the seeding process for their IBIT and spot ETF.
There was some confusion when news of BlackRock’s seeding plan circulated, with some false reports suggesting that the ETF approval would happen on January 3. However, Bloomberg analyst James Seyffart clarified this misconception. He pointed out that BlackRock’s plan to inject $10 million in seed funding on January 3 does not directly indicate an immediate ETF launch, although it could imply a launch in the near future.
Seeding is a crucial step in initiating an ETF. It involves the initial investment that allows the ETF to enter the market and start trading. This seed capital enables the creation of units that form the basis of the ETF, making shares available for investors to trade openly. So, while the injection of funds is a significant step, it does not guarantee an instant launch but signifies the groundwork for a future ETF introduction.
Tags: Bitcoin ETF