BlackRock May Move $200M from Private Bitcoin Trust to Its Spot ETF upon Approval

Rumors suggest that BlackRock plans to give itself a head start by moving funds from its private Bitcoin trust to its ETF.

Giant asset manager BlackRock Inc (NYSE: BLK) may have set plans in motion that will put the company well ahead of its competition if the United States Securities and Exchange Commission (SEC) approves a spot Bitcoin ETF. BlackRock, likely to receive approval according to market observers, may have started the ETF race well in advance.

According to Bloomberg ETF analyst Eric Balchunas, there are rumors that BlackRock could move the assets in its spot Bitcoin private trust into its ETF if it receives approval. In an X post on Tuesday, Balchunas says that although the roughly $200 million moved to the iShares Bitcoin Trust “wouldn’t be new demand per se,” it would definitely “help them in early days of race”.

Balchunas was responding to fellow Bloomberg analyst James Seyffart, who pointed out that BlackRock’s private trust is not new. Last August, BlackRock launched a spot Bitcoin private trust for its institutional clients in response to their interest in crypto. The trust, which is BlackRock’s first attempt to offer direct Bitcoin exposure, tracks the asset’s performance. The nearly $200 million in the trust would significantly help BlackRock’s iShares ETF upon approval, even if the SEC simultaneously greenlights multiple ETFs from other applicants.

BlackRock ETF Updates

BlackRock recently filed amendments to its application for an ETF. The revisions suggest that the company made the updates following conversations with the Commission. The updated filing includes plans to implement monitoring measures to quickly detect suspicious or irregular market movements. The update also includes plans to respond to these irregularities when detected.

Furthermore, BlackRock’s update pledges to comply with Anti-Money Laundering (AML) requirements, and also contains an audited statement from financial services giant PricewaterhouseCoopers (PwC). This announces BlackRock’s commitment to follow rules and avoid any manipulation or fraud. The filing also indicates the company’s readiness to involve third-party platforms for robust know-your-customer (KYC) compliance.

BlackRock is confident that the SEC will approve its ETF application by January.

The asset manager’s plans for an ETF are progressing quite rapidly as BlackRock announced it has received seed funding. According to the firm, an unnamed investor agreed to buy $100,000 worth of iShares Bitcoin Trust shares at $25 per unit. The investor already received 4,000 shares on October 27, 2023.

Last month, BlackRock submitted an application for a spot Ethereum ETF to the SEC. The company appointed major crypto exchange Coinbase Global Inc (NASDAQ: COIN) as the asset custodian.

Bitcoin So Far

Bitcoin is enjoying increased action from all the activity surrounding spot ETFs. The world’s largest asset by market cap hit a new 2023 all-time high on Monday at $42,100 and has consistently risen since then. As of this writing, CoinMarketCap shows that Bitcoin is at $44,000 after climbing nearly 16% in the last 7 days and over 5.6% in 24 hours. Current Marketwatch data shows that Bitcoin’s year-to-date gain is at 165.49%, with over 71% in the last 3 months and nearly 24% in the last month.

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