An unidentified investor invested $100,000 as initial funding for acquiring shares in BlackRock’s spot Bitcoin ETF. This ETF application was submitted in June 2023, preceding a series of similar applications with the U.S. Securities and Exchange Commission (SEC). The investor initiated this purchase on October 27th and received 4,000 shares on the same day. Seed capital refers to the initial funds required to support the creation units that underlie an ETF.
BlackRock offered each of these seed shares at a price of $25, as revealed in an amendment to its S-1 filing with the SEC on December 4th. Notably, Bitwise also updated its prospectus for a spot Bitcoin (BTC) ETF, but there was no mention of seed shares in their filing. This suggests that BlackRock is likely the only issuer that has secured seed funding at this point.
Furthermore, BlackRock was in discussions with the SEC regarding redemption models for spot BTC ETFs, with a preference for an “in-kind structure” that experts at Bloomberg believed could benefit both issuers and investors.
BlackRock initially filed for its iShares Bitcoin Trust (IBTC) in June 2023, generating significant attention in both the cryptocurrency and mainstream financial news due to the historical reluctance of the SEC to approve such products. However, BlackRock’s strong track record with the SEC raised hopes of approval this time.
Several other issuers, including Invesco, WisdomTree, Franklin Templeton, and Valkyrie, also submitted applications in the wake of BlackRock’s filing. Pando recently joined the competition as the 13th issuer by filing in late November. Experts anticipate a decision on these filings by January 2024.
Additionally, the interest in a spot Bitcoin ETF has sparked enthusiasm for a similar product for Ethereum, which is the second-largest cryptocurrency by market capitalization after Bitcoin.