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BlackRock Chooses New Ticker Symbol and Cash-Only Creation Process for Bitcoin ETF: A Step Forward in SEC Approval

BlackRock has made an important update to its iShares Bitcoin Trust (IBIT), revealing a new ticker symbol and a change in the creation process. The asset manager filed an amendment to its S-1 application with the Securities and Exchange Commission (SEC) on Tuesday, disclosing that the ETF will now be cash-only. This means that new shares of the fund can only be created using cash, rather than Bitcoin. The decision to switch to a cash-only creation process was hinted at in minutes released by the SEC last week, following a meeting with BlackRock and Nasdaq executives. The SEC expressed concerns about the use of Bitcoin in the creation process, as it allows registered brokers to handle the cryptocurrency, which is not allowed. By opting for a cash-only creation process, the issuer will have direct control over the Bitcoin involved, eliminating the need for unregistered subsidiaries to handle the cryptocurrency. While this may seem like a minor detail, it is another indication that progress is being made towards the approval of the first Bitcoin ETF in the US. Market analysts have been anticipating this historic approval from the SEC, and BlackRock's latest update suggests that their expectations may indeed be correct.

New Ticker Symbol and Cash-Only Creation Process

  • BlackRock has chosen a new ticker symbol for its iShares Bitcoin Trust (IBIT).
  • The new detail was revealed in an amendment to the asset manager's S-1 application filed with the SEC on Tuesday.
  • The ETF will now be cash-only, meaning new shares can only be created using cash, not Bitcoin.
  • The decision to switch to a cash-only creation process was foreshadowed in minutes released by the SEC last week.
  • The SEC expressed concerns about the use of Bitcoin in the creation process, as it allows registered brokers to handle the cryptocurrency, which is not allowed.
  • By opting for a cash-only creation process, the issuer will have direct control over the Bitcoin involved, eliminating the need for unregistered subsidiaries to handle the cryptocurrency.
  • This change may seem small, but it is another indication that progress is being made towards the approval of the first Bitcoin ETF in the US.
  • Market analysts have been anticipating this historic approval from the SEC, and BlackRock's decision supports the expectation that it may be imminent.

Previous Ticker and ETFs vs. ETPs

  • Initially, it appeared that the iShares Bitcoin Trust would trade under the ticker symbol IBTC.
  • This was based on the fund's inclusion on a list maintained by the Depository Trust & Clearing Corporation (DTCC) of active and pre-launch funds.
  • While the previous ticker symbol is still visible on an archived version of the page, BlackRock has now chosen a different ticker for the ETF.
  • It is important to note the distinction between exchange-traded funds (ETFs) and exchange-traded products (ETPs).
  • ETPs are investment vehicles that have their shares listed on an exchange, tracking the performance of underlying assets or benchmarks.
  • ETFs, on the other hand, are a type of ETP that differ in one key aspect.
  • A spot ETF would track the real-time price of Bitcoin, something that none of the already approved future Bitcoin ETFs can do.
  • The SEC has consistently cited concerns about volatility and risk as reasons for not approving a Bitcoin ETF thus far.

Moving in the Right Direction

  • BlackRock's decision to update the ticker symbol and switch to a cash-only creation process is a positive development.
  • It indicates that progress is being made towards the approval of the first Bitcoin ETF in the US.
  • Market analysts have been eagerly anticipating this approval from the SEC, and BlackRock's move supports the expectation that it may be imminent.
  • While the SEC has expressed concerns about the volatility and risk associated with Bitcoin, the updated filing suggests that the regulatory landscape is evolving.
  • The decision to have direct control over the Bitcoin involved in the creation process demonstrates a commitment to addressing the SEC's concerns.
  • Overall, these recent developments are encouraging for both BlackRock and the broader market, as they suggest a step forward in the path towards a regulated and accessible Bitcoin investment vehicle in the US.
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