BlackRock adds ‘IBIT’ ticker, confirms initial cash model in spot Bitcoin ETF update

BlackRock has submitted a new amendment to the S-1 filing concerning its spot Bitcoin ETF, the iShares Bitcoin Trust, filed on Dec. 18.

The company’s latest filing added a market ticker — IBIT — for the first time, indicating that the fund intends to trade on the Nasdaq under that label. BlackRock’s previous filing used a blank field as a placeholder for the ticker.

The amendment also includes several 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.

Earlier filings explained that the trust will issue and redeem shares in blocks of 40,000, referred to as “baskets.” But whereas a Dec. 4 amendment stated that relevant transactions will involve Bitcoin, the latest Dec. 18 amendment says that the relevant transactions will occur in exchange for cash.

Bitcoin transactions remain a possibility, however. The latest amendment states that if Nasdaq receives the “necessary regulatory approval,” the trust may also perform in-kind creations and redemptions involving Bitcoin.

Later sections of the amendment add several paragraphs detailing transactions between parties. Those sections also reference a “Directed Trade Model” for the first time — a term that refers 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 more minor additions. One section explains that shares do not serve as interest in or obligations of the fund’s cash custodian (Bank of New York Mellon) and the Bitcoin custodian (Coinbase Custody). Previous filings only indicated that shares are not interest in or obligations of BlackRock and various other involved parties.

Another newly added section describes risks related to 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 carry.

One section indicates that the prime execution agent, Coinbase, has committed to sanctions and AML compliance programs. (Incidentally, Coinbase is now referred to as a “prime execution agent” rather than a “prime broker” throughout the text, though there are few substantial changes to its described role.)

BlackRock is one of several asset managers that aims to offer the first spot in Bitcoin ETF in the United States. Though the SEC has not approved its application, Bloomberg ETF applicants Eric Balchunas and James Seyffart believe there is a 90% chance that a fund will gain approval by Jan. 10, 2024.

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