BlackRock has filed a new amendment to the S-1 filing related to its spot Bitcoin ETF, the iShares Bitcoin Trust, filed on December 18.
The company’s latest filing added a market ticker – IBIT – for the first time, indicating the fund plans to trade under that label on the Nasdaq. BlackRock’s previous filing used an empty field as a placeholder for the ticker.
The amendment also includes a number of other changes that appear to reflect recent meetings between BlackRock and the U.S. Securities and Exchange Commission (SEC), which focused on cash and in-kind creation and redemption models.
Previous documents explained that the trust will issue and buy back shares in blocks of 40,000, known as “baskets.” But while a December 4 amendment stated that relevant transactions would involve Bitcoin, the latest December 18 amendment says the relevant transactions will take place in exchange for cash.
However, Bitcoin transactions remain a possibility. The latest amendment states that if Nasdaq receives “necessary regulatory approval,” the trust can also make in-kind creations and redemptions involving Bitcoin.
Later parts of the amendment add several paragraphs describing the transactions between the parties. These sections also refer for the first time to a ‘Directed Trade Model’ – a term referring to the purchase and sale or settlement of Bitcoin between the trust and various counterparties.
Other changes concern risks, interest in companies
BlackRock’s current amendment also introduces other, smaller additions. One section explains that shares do not serve as interests in or liabilities of the fund’s cash custodian (Bank of New York Mellon) and Bitcoin custodian (Coinbase Custody). Previous filings indicated only that shares are not interests in or obligations of BlackRock and various other parties involved.
Another newly added section describes the risks associated with the CF Benchmark Index, which determines the trust’s net asset value (NAV). This section notes that system failures and errors at CF Benchmarks Ltd. could lead to losses and costs that the trust and its shareholders would incur.
One section indicates that the main execution agent, Coinbase, has committed to sanctions and AML compliance programs. (Incidentally, Coinbase is now referred to throughout the text as a “prime execution agent” rather than a “prime broker,” although there are few substantive changes to its described role.)
BlackRock is one of several asset managers aiming to offer the top Bitcoin ETF spot in the United States. Although the SEC has not approved the filing, Bloomberg ETF applicants Eric Balchunas and James Seyffart believe there is a 90% chance that a fund will receive approval before January 10, 2024.
