BlackRock takes apparent new step in bitcoin ETF prep

The world’s largest asset manager continues to prep its proposed bitcoin ETF as segment observers have pointed to potential bullish signs that such products will be approved.

BlackRock’s planned iShares Bitcoin Trust is listed on the Depository Trust and Clearing Corporation (DTCC) website, industry watchers pointed out in X posts Monday. The planned fund’s ticker is IBTC, according to the listing.  

A DTCC spokesperson told Blockworks the proposed ETF was added to the list in August. The inclusion in the “eligibility file” of both active funds and potential ETF launches is “standard practice,” the representative noted, adding it is “not indicative” of regulatory approval.

Bloomberg Intelligence senior analyst Eric Balchunas said Monday that IBTC is the first proposed spot bitcoin ETF listed on DTCC — a financial market infrastructure giant that processes trillions of dollars in securities transactions daily.

A DTCC subsidiary — National Securities Clearing Corporation (NSCC) — has a process for clearing ETFs that includes “the ability to review…the ETF’s portfolio constituents, which is also used to automate the creation and redemption of ETF shares and their subsequent settlement,” according to the company.

A representative for DTCC did not immediately return a request for comment. A BlackRock spokesperson said the firm was unable to comment due to “filing restrictions.”

BlackRock amended its bitcoin ETF proposal on Oct. 18. 

Scott Johnsson, an associate at Davis Polk & Wardwell, noted the updated S-1 filing included a CUSIP for the product — a nine-character code needed to identify a North American security for the clearing and settlement of trades.

The filing also contained language that seed creation baskets were to be purchased in October “subject to conditions” but did not specify a date or amount. 

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“Def notable BlackRock is leading charge on these logistics (seeding, ticker, dtcc) that tend to happen just prior to launch,” Balchunas wrote in a Monday X post. “Hard not to view this as them getting signal that approval is certain/imminent.”

Others had amended their bitcoin ETF applications prior to BlackRock doing so. 

Ark Invest and 21Shares had updated their bitcoin ETF filing on Oct. 11. Bloomberg Intelligence analysts pointed to various additions, such as clarification that the trust’s assets would not be commingled with corporate or other customer assets.

Ark CEO Cathie Wood told CNBC in an interview last week that the amendment followed dialogue with the SEC.

Read more: Another would-be bitcoin ETF player: ‘It’s going to get approved’

The filing amendments are not the only apparent progress being made in the quest for a bitcoin ETF. 

Grayscale filed last week to register shares of its Bitcoin Trust (GBTC) under the Securities Act of 1933 as part of a new step in the process to ultimately convert the trust into an ETF.

The DC Circuit Court of Appeals on Monday formalized its August ruling that the SEC rejecting the GBTC conversion to an ETF, but approving bitcoin futures funds, was “arbitrary and capricious.”

The firm “looks forward to continuing to work constructively with the SEC” to convert GBTC to an ETF, a Grayscale spokesperson told Blockworks — adding that “we intend to move as expeditiously as possible.”

Bitcoin’s (BTC) price was at roughly $31,600 at about 5:30 pm ET — up 6% from 24 hours prior.

Updated Oct. 25, 2023 at 9:03 am ET: Updated to reflect new information after receiving comments from a DTCC spokesperson.

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