New York-based asset management giant BlackRock quietly seeded its spot Bitcoin exchange-traded fund (ETF), as revealed in a filing published Tuesday.
After a series of meetings with officials at the U.S. Securities and Exchange Commission (SEC), BlackRock, one of the hopeful issuers of the crypto investment vehicle, filed an updated prospectus to launch a spot Bitcoin ETF Tuesday.
According to Bloomberg Intelligence ETF analyst Eric Balchunas, the updated filing indicated that BlackRock had seeded its proposed Bitcoin ETF with a $100,000 investment on Oct. 27. Balchunas noted that while the seeded amount was small, it aligned with expectations.
"Looks like they did seed the ETF back in October like we thought, altho small amount $100k," Balchunas said in a tweet that comes with a screenshot of one of the pages of BlackRock's latest filing with the SEC.
"The Seed Capital Investor agreed to purchase $100,000 in Shares on Oct. 27, 2023, and on Oct. 27, 2023, took delivery of 4,000 Shares at a per-Share price of $25.00 (the "Seed Shares")," a section in the filing read.
Seeding an exchange-traded fund (ETF) is a critical foundational step in creating a crypto investment vehicle. When a fund is seeded, the sponsor or institutional investors provide initial capital or funding, enabling the ETF to purchase assets, such as Bitcoin.
Balchunas clarified that BlackRock's $100,000 seed represented the "bare minimum norm for an ETF," serving more as an "operational" requirement. He suggested that BlackRock might secure more early assets under management (AUM) or volume closer to the launch to project success initially.
Although seen as an operational step preceding the launch, for some, BlackRock's action signals a positive indication of an imminent spot Bitcoin ETF in the U.S.
Looks like they did seed the ETF back in October like we thought, altho small amount $100k. pic.twitter.com/RdkM0BPTYA
— Eric Balchunas (@EricBalchunas) December 5, 2023
It may be recalled that BlackRock's spot Bitcoin ETF ticker was listed on the official website of the Depository Trust and Clearing Corporation (DTCC) in October, which drew speculations of its imminent approval by the SEC.
They arent on twitter enough i guess lol.. altho it wasn't just the DTCC list it was having a ticker ready and the Oct seeding that gave off a a pre-launch crossing t's and dotting i's vibe.
— Eric Balchunas (@EricBalchunas) October 24, 2023
The ticker on the DTCC website remained a mystery to the crypto community, but Balchunas noted at the time that it was not just the listing on the website that was surprising but "having a ticker ready and the Oct seeding that gave off a pre-launch crossing t's and dotting i's vibe."
