Blackrock Secured A $100,000 Investment For The Spot Bitcoin Etf.

BlackRock and other major financial institutions are competing to launch the first spot Bitcoin ETF in the United States.

In October 2023, according to a report filed with the United States Securities and Exchange Commission (SEC), BlackRock received a $100,000 seed investment for a spot Bitcoin exchange-traded fund (ETF) from an undisclosed investor. The report states that the investor agreed to purchase 4,000 shares at a price of $25 per share and acted as a "legal contractor under the Seed Creation Baskets."

The disclosed report by BlackRock outlines details regarding the asset manager's sponsor fee payment plans. The company plans to receive Bitcoin or fiat currency from a short-term commercial credit provider. By doing so, BlackRock can collect its fees using credit instead of selling BTC (ETF), thus avoiding a significant impact on BTC prices.

The commercial credit agreement will take effect on the business day following the application date. The credit fee will be determined by dividing 11% plus the target interest rate by 365. For example, assuming a target interest rate of 5.50% on November 20, 2023, the estimated credit fee would be 11% of the borrowed amount plus 5.50%, divided by 365.

ETF analyst Eric Balchunas considered BlackRock's move as an interesting development.

This is so interesting in the nerdiest way.

— James Seyffart (@JSeyff) December 5, 2023

In July, BlackRock was one of the first corporate giants to apply for a spot Bitcoin ETF in the United States. The company's application is currently under review by the United States Securities and Exchange Commission (SEC). This application is one of the 13 applications awaiting a decision from the SEC.

Although the SEC has previously rejected applications for spot Bitcoin ETFs, market experts predict that the SEC is likely to approve the first spot Bitcoin ETF in the United States in early 2024. This could mark a significant milestone in the cryptocurrency markets and further increase the interest of major financial institutions in crypto assets.

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