BlackRock, the world’s largest asset manager, received $100,000 seed funding from an undisclosed investor for its Spot Bitcoin (B T c) exchange-traded fund (ETF) in October 2023, according to its latest Securities and Exchange Commission filing. filed,
SEC filings revealed that the investor agreed to purchase $100,000 of shares in exchange for 4,000 shares at a price of $25.00 per share on October 27, 2023. Seed funding allows an ETF to fund the creation of underlying shares that can be offered and traded on the open market.
BlackRock’s latest filing also revealed some details on the asset manager’s plans to pay the sponsor’s fees, where it plans to borrow bitcoin or cash in the form of trade credit from the trade credit lender on a short-term basis. BlackRock can “recoup its fees” through loans rather than selling BTC (ETF assets). This way, they “don’t affect the price of BTC that much.”
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Trade credit will be settled on the business day following the execution date, with a funding charge of 11% + Fed Fund Target rate divided by 365 ((11% + Fed Fund Target)/365). For example, suppose the fed funds target rate was 5.50% on November 20, 2023, then the notional funding charge as of that date would be 11% + 5.5% on the amount borrowed divided by 365.
ETF analyst Eric Balchunas called the new revelations an interesting development in the most silly way.
It’s very interesting in a very interesting way.
– James Seyffert (@JSeyff) 5 December 2023
BlackRock was one of the first institutional giants to propose and file for a spot Bitcoin ETF in 2023 as early as July this year. BlackRock’s filing indicated More than a dozen other institutional giants to apply for spot BTC ETF, While the SEC rejected most previously filed spot BTC ETFs before BlackRock entered the spot ETF race in 2023, market experts predict that by the beginning of 2024, the SEC will approve the first spot BTC ETF in the United States. Will approve.
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