Arkham Intelligence Claims to Identify On-Chain Bitcoin Addresses Backing US Spot ETFs
Summary:
Blockchain research platform, Arkham Intelligence, has claimed to have identified on-chain Bitcoin addresses backing a number of spot Bitcoin exchange-traded funds (ETFs) in the US, including those issued by BlackRock, Bitwise, Fidelity, and Franklin Templeton. The detection of these addresses means transaction hashes managed by these Bitcoin ETFs can now be monitored directly on the blockchain. Arkham is yet to identify addresses of five more spot Bitcoin ETFs currently operational in the US. The revelation has stirred the ongoing debate over the security risks vs. the need for transparency related to disclosing the on-chain addresses of spot Bitcoin ETFs.
Arkham Intelligence, a blockchain research entity, alleges it has pinpointed the on-chain addresses holding Bitcoin backing various US spot Bitcoin exchange-traded funds (ETFs). On January 22, the firm shared this information, stating it had discovered the on-chain locations of four Bitcoin ETFs, which were issued by BlackRock, Bitwise, Fidelity, and Franklin Templeton. Anyone can now scrutinize the transaction hashes managed by these four Bitcoin ETFs, thanks to Arkham’s data.
Going by their findings, the iShares Bitcoin Trust, owned by BlackRock currently possesses 33,430 BTC, which is valued roughly at $1.3 billion. BlackRock’s website also corroborates this public information about the IBIT holdings. Few months ago, in September 2023, Arkham asserted that it had determined the addresses of the Grayscale Bitcoin Trust, or GBTC, which transitioned to a spot Bitcoin ETF following its historic approval by US securities watchdogs on January 10, 2024. GBTC is the top spot Bitcoin ETF, with holdings of 558,280 BTC, which is almost $29 billion at the time of writing.
There are currently other five spot Bitcoin ETFs operational in the US which Arkham is yet to identify, namely those by ARK Invest and 21Shares, Invesco and Galaxy, VanEck, Valkyrie, and WisdomTree.
To assure the security of the underlying BTC, there has been a demand from crypto-enthusiast for spot Bitcoin ETF issuers to reveal the Bitcoin addresses backing heir products. There are suggestions that to enhance competitiveness, they might eventually be required to provide this information. Meanwhile, several company executives have voiced concerns about the potential security risks tied to disseminating the on-chain addresses of spot Bitcoin ETFs. To that end, in November 2022, Grayscale rejected requests to reveal on-chain wallet details, citing "security concerns".
Co-founder of 21Shares and 21.co, Ophelia Snyder, opines showcasing wallet addresses for spot Bitcoin ETFs may result in "unintended consequences." During an early January interview with Cointelegraph, she cautioned that such exposure could lead to issues with trading infrastructure and other unforeseen problems.
Published At
1/23/2024 1:15:00 PM
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