BlackRock plans to invest $10 million into a seed fund for its proposed spot Bitcoin exchange-traded fund (ETF). This financial commitment is part of the firm’s preparations for the ETF’s anticipated launch, pending regulatory approval from the Securities and Exchange Commission (SEC).
According to Bloomberg Intelligence ETF analyst James Seyffart, the world’s largest asset manager BlackRock has submitted an updated S-1 filing with the SEC for their Bitcoin ETF. The amended filing included details regarding BlackRock’s movement prior to the Bitcoin ETF’s pending approval, aiming to inject $10 million into a seed fund.
BlackRock Advances With Seed Fund
“On January 3, 2024, the Seed Shares were redeemed for cash and the Seed Capitol Investor purchased the Seed Creation Baskets, comprising of 400,000 Shares at a pre-share price of $25.00,” detailed the filing.
“Total proceeds to the Trust from the sale of the Seed Creation Baskets were $10,000,000,” wrote the filing. “The Trust purchased [ ] bitcoin at the price of $[ ] per bitcoin with the proceeds of the Seed Creation Basket on January 3, 2024.”
Before this — SEED MOVEMENTS DO NOT MEAN LAUNCH
Looking like BlackRock is *planning* to make moves on Jan 3rd. They’re seeding the ETF with $10 million. But maybe means BlackRock would be expecting a launch to happen shortly after? pic.twitter.com/PknXs5B2TP
— James Seyffart (@JSeyff) December 22, 2023
Though the seed movements “do not mean launch,” according to Seyffart, BlackRock’s seed round plan for the Bitcoin ETF would still “obviously jive with our Jan. approval prediction.”
It was also emphasized that even not yet named, the Authorized Participants will not be handling Bitcoin directly but only cash.
“The Authorized Participants will deliver only cash to create Shares and will receive only cash when redeeming Shares,” according to a post by Bloomberg analyst Eric Balchunas. “Further, Authorized Participants will not directly or indirectly purchase, hold, deliver, or receive bitcoin as part of the creation or redemption process.”
Bitcoin ETF Could “Completely Destroy” Bitcoin: Arthur Hayes
While major financial establishments like BlackRock, Fidelity, and Grayscale are actively planning and revising their Bitcoin ETF applications, Arthur Hayes, co-founder and former CEO of BitMEX, raised significant concerns about their potential impact on Bitcoin in a recent blog post.
“Imagine a future where the largest Western and Chinese asset managers hold all the Bitcoin in circulation,” said Hayes. “Now that a handful of firms hold all the Bitcoin, and have no actual use for the Bitcoin blockchain, the coins never move again.”
“People purchase Bitcoin ETF derivatives rather than buying and holding Bitcoin in self-custodied wallets,” said Hayes. “The end result is miners turn off their machines as they can no longer pay for the energy required to run them. Bye-bye, Bitcoin!”
In conclusion, if the traditional financial institutions’ spot Bitcoin ETFs get “too successful,” “they will completely destroy Bitcoin,” according to Hayes.
