The world’s largest asset manager, BlackRock, has received $100,000 in seed funding for its spot Bitcoin exchange-traded fund (ETF). The funding came from an unknown investor and was disclosed in a recent Securities and Exchange Commission filing. The investor agreed to purchase $100,000 worth of shares in the ETF, which will allow the creation of underlying shares that can be traded on the open market. In addition to the funding, BlackRock also revealed its plans to pay the sponsor’s fee. Instead of selling BTC, the ETF asset, BlackRock plans to borrow Bitcoin or cash as Trade Credit from a Trade Credit Lender on a short-term basis. This way, they can charge their fees without impacting the BTC price significantly. The settlement of trade credits will occur on the business day following the execution date and will incur a financing fee. The fee is calculated as 11% plus the Fed Funds Target rate divided by 365. For example, if the Fed Funds Target rate is 5.50%, the financing fee on the borrowed funds would be 11% + 5.5% divided by 365. BlackRock’s filing for a spot Bitcoin ETF earlier this year prompted other institutional giants to file for similar ETFs. While most of the earlier filed spot BTC ETFs were rejected by the SEC, market experts predict that the first spot BTC ETF in the United States will likely be approved by early 2024. Overall, these developments in the world of Bitcoin ETFs are seen as interesting and significant by industry analysts.
This News Article was automatically generated by Bob the Bot (AI)
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | Europe |
| Countries | 🇺🇸 |
| Sentiment | neutral |
| Relevance Score | 1 |
| People | Eric Balchunas |
| Companies | BlackRock, Securities and Exchange Commission (SEC) |
| Currencies | Bitcoin |
| Securities | None |
