BlackRock has updated the iShares Bitcoin Trust (IBIT) S-1 registration statement to introduce a new language that outlines the potential risks posed by quantum computing.
The revision, submitted on May 9, reflects growing industry awareness of how advanced computing technologies affect cryptographic systems used in digital assets.
BlackRock flags theoretical quantum risk to bitcoin security
In the filing, asset managers warned that future advances in quantum computing could undermine the security frameworks that underpin Bitcoin.
If quantum technology evolves far beyond its current state, it could potentially deprecate the encryption algorithms used by Bitcoin.
This allows malicious actors to take advantage of the vulnerability, such as gaining unauthorized access to wallets that store Bitcoin for the trust or its investors.
Quantum Computing is still developing, but BlackRock emphasized that the full capabilities of technology remain uncertain.
However, companies believe it is important to disclose theoretical threats that could affect the performance and security of crypto-investment products.
Bloomberg ETF analyst James Sefert said the update is an important factor that is the standard for ETF submissions. He explained that he routinely lists all potential threats, no matter how far the publisher is.
“To be clear. These are just basic risk disclosures. We’ll highlight the potential that could be wrong with the products and underlying assets they list. It’s completely standard. It makes sense honestly.”
In particular, BlackRock submissions also cover concerns about previous market events such as regulatory measures, energy consumption, China’s mining concentration, network forks, and the collapse of FTX.
Despite these warnings, IBIT remains the largest Bitcoin ETF in the market. It recorded 19 days of consecutive influxes, attracting more than $5.1 billion during the reporting period.
Ethereum ETF filing adds a real redemption structure
In another submission, Seyffart revealed that BlackRock also modified the S-1 application for SPETEREUM ETF.
The new version includes plans to support the creation and redemption of physical in person. This is a model that allows investors to exchange ETF stocks directly for Ethereum instead of using cash.
This structure can reduce transaction costs and reduce market friction. They also avoid converting crypto into Fiat currency. This is currently required on a cash-based model. This approach can help issuers minimize price slippage and save on transaction fees.
The SEC has yet to approve the crypto ETF’s physical redemption model, but analysts look forward to progress this year.
“Eric Balchunas & I look forward to the SEC approval of the physical SEC at some point this year. In particular, the first application of Ethereum ETF, which allows for physical creation/redeem, will have a final deadline around 10/11/25,” Seyffart said.
The BlackRock filing follows a meeting between the company and the US Securities and Exchange Commission (SEC) and discusses staking and securities tokenization.
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