BlackRock Makes Key Changes to Bitcoin ETF Ahead of Expected Launch

New ticker, who this? BlackRock has chosen a new ticker for its iShares Bitcoin Trust: IBIT. The new detail appeared in an amendment to the asset manager’s S-1 application, which was filed with the SEC yesterday. On top of that, the filing now shows that the ETF will be cash-only.

That means new shares of the fund can only be created with cash, not Bitcoin. The switch was foreshadowed in minutes that the SEC released last week after it met with BlackRock and Nasdaq executives.

“The SEC just was not going to be comfortable enough with in-kind because it allows registered brokers to use Bitcoin and that's not allowed,” Bloomberg Intelligence analyst Eric Balchunas said Tuesday during an ETF webinar. “I don't think they want any unregistered subsidiaries to touch Bitcoin. Cash creation solves that—it means the issuer basically touches the Bitcoin and no one else.”

It may not seem like much, but it’s yet another hint that things are moving in the right direction for BlackRock, and that the expectation from market analysts that the SEC is set to make history by approving the first Bitcoin ETF in the U.S. may indeed be correct.

It looked for a while that the iShares Bitcoin Trust would trade under the IBTC ticker. That’s because in late October, it appeared on a list maintained by the Depository Trust & Clearing Corporation (DTCC) of active and pre-launch funds.

In fact, it’s still visible on an archived version of the page.

An exchange-traded product is an investment vehicle that has its shares listed on an exchange. ETPs track the performance of underlying assets, like Bitcoin and Ethereum, or benchmarks like commodities, currencies, stocks, and bonds.

Exchange-traded funds (ETFs) fall under the ETP umbrella, but differ in one important way: A spot ETF would track the real-time price of Bitcoin, which none of the already-approved future Bitcoin ETFs can do.

The Securities and Exchange Commission has been steadfast in saying there’s too much volatility and risk of manipulation in crypto markets to allow a spot Bitcoin ETF to trade in the U.S. But the past cycle of delays from the SEC were accompanied by meetings and feedback from the regulator—fueling anticipation that an approval could finally be on the horizon. If approved, most market observers expect a large influx of capital to flow into crypto.

Getting a ticker registered with the clearing and settlement company is an important prerequisite to having to trade on an exchange. The IBIT ticker isn’t on the current list, though.

Somewhat confusingly, IBIT is the same ticker once used by issuer Defiance ETFs for its Daily Short Digitizing the Economy ETF—a fund it described in a press release as allowing investors “to hedge the crypto industry.” The ETF launched in September 2022 and shut down a year later.

But there are reasons why IBTC wasn’t an ideal ticker for BlackRock’s new Bitcoin product. Bloomberg analyst Balchunas pointed out that BlackRock is already using it for one of its products in Europe.

“$IBIT was available for recycle via liquidated Defiance ETF. And it's just as sober and Boomer-friendly as IBTC,” he wrote on X (formerly Twitter).

Edited by Guillermo Jimenez.