iShares Bitcoin Trust assets are going to "consist primarily of bitcoin held by a custodian on behalf of the Trust." The custodian in this case will be Coinbase, states the filing.
"The Trust intends to issue Shares on a continuous basis. The Trust issues and redeems Shares only in blocks of 40,000 or integral multiples thereof. A block of 40,000 Shares is called a “Basket.” These transactions take place in exchange for bitcoin."
So far the U.S. Securities and Exchange Commission has shut down every Bitcoin spot ETF attempt in the country, including those by VanEck, Wisdom Tree, and Grayscale. It did approve a number of futures-based Bitcoin ETFs.
"The proposed ETF is benchmarked against the CME CF Bitcoin Reference Rate," said crypto exchange Kraken, commenting on the filing, as reported by CoinDesk.
"CF Benchmarks takes price data exclusively from cryptocurrency exchanges that adhere to the highest possible standards of market integrity and transparency. This protects investors as products benchmarked against it can then consistently and reliably track the spot price of the underlying asset," it added.