BlackRock’s Bitcoin ETF has recently come under scrutiny due to claims that the firm may have pressured Coinbase to ensure all Bitcoin holdings are fully on-chain.

This development has sparked significant attention from crypto community members. Consequently, Eric Balchunas, a senior ETF analyst at Bloomberg, has shared insights into the matter.
BlackRock Avoiding “Paper BTC” Concerns

Balchunas confirmed that BlackRock operates its own blockchain node and retrieves Bitcoin balances from its wallet addresses on Coinbase Prime each night to validate the Bitcoin held by its IBIT ETF. He mentioned that while they are willing to share this information with institutional clients upon request, they won’t publish it publicly due to the risk of increased spam, which they already receive in significant volumes.

Accordingly, Balchunas emphasized that this move is standard practice for BlackRock, which has a long history of managing ETFs across various asset classes. He noted that the firm’s actions reflect its commitment to operational transparency amid growing concerns about “paper BTC.” By implementing these verification measures, BlackRock aims to address concerns about fake or unverified Bitcoin holdings by ETFs. Essentially, the diligence highlights BlackRock’s desire to maintain institutional trust.

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