BlackRock to Seed Spot Bitcoin ETF In October; Why It’s A Big Deal?

Bloomberg’s Exchange Traded Fund (ETF) analyst Eric Balchunas has highlighted a recent bold move made by top investment asset management firm BlackRock in respect to its Bitcoin spot ETF. 

BlackRock Sets October Date For Bitcoin ETF Seeding

According to a post shared earlier today on the X app by Balchunas, BlackRock has hinted at its plan to seed the iShares Bitcoin ETF this month. This was included in the recent amendment of the firm’s Bitcoin ETF filing. Balchunas explained the concept of ETF seeding to his more than 142.8k followers;

“Seeding an ETF is when initial funding is provided (typically) by a bank or broker dealer used to purchase a few creation units (in this case bitcoin) in exchange for ETF shares which can be traded in open market on Day One,” he said.

BlackRock stating in their recent spot Bitcoin ETF amendment that they are seeding the ETF in October. Don’t want to read that much into it but it is new info not in original filing so noteworthy (esp bc they BlackRock). Great catch by Scott. https://t.co/CGBmuTJ7W0

— Eric Balchunas (@EricBalchunas) October 23, 2023

Markedly, Balchunas’ post was a reaction to a post made by United States lawyer Scott Johnson. The lawyer outlined some of the developments that caught his attention in the latest iShares (Blackrock) S-1 amendment, amongst which was the seed with cash plan for October and the Committee on Uniform Securities Identification Procedures (CUSIP) number that has already been obtained by BlackRock. 

Spot Bitcoin ETF Approval is a Certainty

Johnson noted that he tried not to make a big deal of BlackRock’s decision to seed with cash earlier than expected. Likewise, Balchunas shared the same sentiment, citing that such seedings are usually not a lot of money which could make the public say “omg Blackrock is buying a ton of bitcoin”.

At the same time, he perceives the move to be a sign of good omen that an approval for spot BTC ETF is coming from the United States Securities and Exchange Commission (SEC). By taking such a bold step, BlackRock is demonstrating optimism and confidence in the expected decision of the U.S. regulator. 

In recent times, several industry experts have equally shared their thoughts about the possibility of the SEC issuing an approval to the numerous Bitcoin ETF applications on its desk. CryptoLaw founder John E. Deaton offered insights into the potential approval timeline after stating that receiving an approval is a certainty. 

He noted that this approval could happen “before the end of the year or certainly before the end of the 1st Quarter of 2024.”