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Major players in the financial industry are actively pursuing the coveted position of launching the first Bitcoin ETF in the US. On September 29, key contenders, including BlackRock, Invesco, WisdomTree, Valkyrie, Bitwise, and Fidelity, submitted their revised S1 applications, signaling intense developments within the Bitcoin ecosystem.
Bitwise vs BlackRock in Bitcoin ETF Race
In a recent development, Bloomberg’s senior ETF analyst, Eric Balchunas, reported that Bitwise has officially filed its S-1 form. The document reveals a notable commitment, with an impressive $200 million earmarked to seed Bitwise’s ETF ($BITB).
This substantial investment surpasses BlackRock’s known seed capital of $10 million. While the identity of the entity making this significant commitment remains undisclosed, the injection of $200 million is likely to provide substantial support in the initial stages of the ETF race. The filing does not currently name an Authorized Participant (AP), but it is expected to be disclosed in the near future.
Seed capital constitutes the initial funding essential for the launch of an ETF, enabling it to be accessible to investors. This financial resource also helps in supporting the creation of units that form the foundation of the ETF, facilitating the offering and trading of shares in the open market. While traditional sources of seed capital have predominantly been banks and broker-dealers, several ETFs have also utilized self-seeding strategies in the past.
JPMorgan As BlackRock’s AP
In its fifth amendment, BlackRock revealed that Jane Street and JPMorgan are their Authorized Participants (APs) for its ETFs. The noteworthy inclusion of JPMorgan as an AP, especially following CEO Jamie Dimon’s critical comments on cryptocurrency, raises eyebrows.
Just three weeks after Dimon’s statement characterizing Bitcoin as a tool for criminals, drug traffickers, and money launderers before Congress, his firm now becomes an authorized participant for the BlackRock Bitcoin ETF.
This development underscores a divergence between the bank’s institutional activities and its leadership’s public stance. In the current regulatory landscape, JPMorgan’s role is of particular significance, as its strong market presence in the investment banking sector can contribute credibility and stability to the ETFs it supports.
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