Bitcoin ETF

Bitcoin

BlackRock

The world’s largest asset manager has filed for an amendment for its Bitcoin exchange-traded fund (ETF) following widespread investor concerns over Coinbase’s onchain settlement practices.
BlackRock has filed an amendment to require Bitcoin (<a data-ct-non-breakable="null" href="https://cointelegraph.com/bitcoin-price" rel="" target="_self" text="null" title="https://cointelegraph.com/bitcoin-price">BTC</a>) withdrawals within 12 hours from the ETF’s custodian, Coinbase, according to a Sept. 16 <a data-ct-non-breakable="null" href="https://www.sec.gov/Archives/edgar/data/1980994/000143774924029619/ex_725171.htm" rel="null" target="null" text="null" title="null">filing</a> with the United States Securities and Exchange Commission.
BlackRock wrote in the filing:
<blockquote>
 “Subject to confirmation of the foregoing required minimum balance, Coinbase Custody shall process a withdrawal of Digital Assets from the Custodial Account to a public blockchain address within 12 hours of obtaining an Instruction from Client or Client’s Authorized Representatives.”
</blockquote>
<figure>
 <img alt="BlackRock Bitcoin ETF demands 12-hour BTC withdrawals from Coinbase" name="" src="https://s3.cointelegraph.com/uploads/2024-09/01921eef-2da9-7f60-8c8e-98561da047f7">
 <figcaption style="text-align: center;">
 BlackRock ETF amendment. Source: sec.gov
 </figcaption>
</figure>
BlackRock’s new amendment follows widespread industry concerns about Coinbase’s ETF custodial practices. Increasingly, investors have been asking Coinbase to provide onchain proof of the Bitcoin bought on behalf of the spot ETFs.
Coinbase is the custodian for 10 out of 11 spot Bitcoin ETFs and eight out of the nine recently approved Ether (<a data-ct-non-breakable="null" href="https://cointelegraph.com/ethereum-price" rel="" target="_self" text="null" title="https://cointelegraph.com/ethereum-price">ETH</a>) ETFs in the US.
Related: <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/tether-transparency-business-structure-118b-ftx-concern" rel="" target="_self" text="null" title="https://cointelegraph.com/news/tether-transparency-business-structure-118b-ftx-concern">Investors claim Tether’s $118B reserves may face audit and liquidity risks</a>
<h2 id="coinbase-ceo-clarifies-investor-concerns-over-coinbase-s-bitcoin-etf-custody-practices">Coinbase CEO clarifies investor concerns over Coinbase’s Bitcoin ETF custody practices</h2>
Despite the newfound institutional inflows from the Bitcoin ETFs, BTC prices have been stagnating for the past three months.
This is partly what prompted widespread investor concerns that Coinbase was buying “paper BTC,” or Bitcoin IOUs, on behalf of Bitcoin ETF issuers, hence suppressing Bitcoin price.
However, all ETF transactions are ultimately settled onchain, despite not publicly sharing all ETF addresses, according to Brian Armstrong, co-founder and CEO of Coinbase.
In response to investor concerns, Armstrong <a data-ct-non-breakable="null" href="https://x.com/brian_armstrong/status/1835022703570702490" rel="nofollow noopener" target="_blank" text="null" title="https://x.com/brian_armstrong/status/1835022703570702490">wrote</a> in a Sept. 14 X post:
<blockquote>
 “If you want audits, Deloitte audits us annually, we’re a public company. I doubt our institutional clients want people dusting all their addresses, and it’s not our place to share for them. This is what it looks like if you want a bunch of institutional money to flow into Bitcoin.”
</blockquote>
<figure>
 <img alt="BlackRock Bitcoin ETF demands 12-hour BTC withdrawals from Coinbase" name="" src="https://s3.cointelegraph.com/uploads/2024-09/01921eef-a4ac-7225-ad4d-7c2e9c59c168">
 <figcaption style="text-align: center;">
 Source: <a data-ct-non-breakable="null" href="https://x.com/brian_armstrong/status/1835022703570702490" rel="nofollow noopener" target="_blank" text="null" title="https://x.com/brian_armstrong/status/1835022703570702490">Brian Armstrong</a>
 </figcaption>
</figure>
Investor concerns started intensifying in August after Coinbase first <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/coinbase-cbbtc-boost-bitcoin-defi" rel="" target="_self" text="null" title="https://cointelegraph.com/news/coinbase-cbbtc-boost-bitcoin-defi">teased the development of a new Wrapped Bitcoin</a> (<a data-ct-non-breakable="null" href="https://cointelegraph.com/wrapped-bitcoin-price-index" rel="" target="_self" text="null" title="https://cointelegraph.com/wrapped-bitcoin-price-index">wBTC</a>), called Coinbase BTC (cbBTC).
Related: <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/stablecoins-crypto-threatening-fiat-money-dominance-eastern-asia" rel="" target="_self" text="null" title="https://cointelegraph.com/news/stablecoins-crypto-threatening-fiat-money-dominance-eastern-asia">Stablecoins and crypto are threatening fiat money dominance in Eastern Asia</a>
<h2 id="blackrock-and-bitcoin-etfs-aren-t-the-cause-of-the-btc-price-slump-analyst">BlackRock and Bitcoin ETFs aren’t the cause of the BTC price slump: Analyst</h2>
Since their launch in January, the ETFs have amassed over $59.2 billion worth of cumulative onchain holdings, according to Dune <a data-ct-non-breakable="null" href="https://dune.com/hildobby/btc-etfs" rel="nofollow noopener" target="_blank" text="null" title="https://dune.com/hildobby/btc-etfs">data</a>.
BlackRock’s IBIT remains the largest Bitcoin ETF, with an over 38% market share and over $22.5 billion worth of onchain holdings.
<figure>
 <img alt="BlackRock Bitcoin ETF demands 12-hour BTC withdrawals from Coinbase" name="" src="https://s3.cointelegraph.com/uploads/2024-09/01921eef-fc70-7dc5-95a2-51d4061b1dcc">
 <figcaption style="text-align: center;">
 Bitcoin ETF issuers. Source: Dune
 </figcaption>
</figure>
Despite the increasing accusations, ETFs weren’t the reason behind Bitcoin’s recent price slump caused by native Bitcoin holders, according to Eric Balchunas, senior ETF analyst at Bloomberg.
The analyst <a data-ct-non-breakable="null" href="https://x.com/EricBalchunas/status/1835076543204540430" rel="nofollow noopener" target="_blank" text="null" title="https://x.com/EricBalchunas/status/1835076543204540430">wrote</a> in a Sept. 15 X post:
<blockquote>
 “I get why these theories exist and ppl want to scapegoat the ETFs. Bc it is too unthinkable that the native HODLers could be the sellers. But they are… All the ETFs and BlackRock have done is save BTC’s price from the abyss repeatedly.”
</blockquote>
By Feb. 15, ETFs <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/bitcoin-etfs-about-75-new-investment" rel="" target="_self" text="null" title="https://cointelegraph.com/news/bitcoin-etfs-about-75-new-investment">accounted for about&nbsp;75% of new investment&nbsp;in Bitcoin</a>, which had surpassed the $50,000 mark. Magazine: <a data-ct-non-breakable="null" href="https://cointelegraph.com/magazine/donald-trump-bitcoin-burgers-arthur-hayes-fed-rate-cut-hodlers-digest/" rel="" target="_self" text="null" title="https://cointelegraph.com/magazine/donald-trump-bitcoin-burgers-arthur-hayes-fed-rate-cut-hodlers-digest/">Trump buys burgers with BTC, Arthur Hayes skeptical on rate cut, and more: Hodler’s Digest, Sept. 15–21</a>

BlackRock Bitcoin ETF demands 12-hour BTC withdrawals from Coinbase

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