BlackRock Warns of Quantum Computing Risks in IBIT Bitcoin ETF Filing
Asset management giant BlackRock has updated its S-1 filing for the iShares Bitcoin Trust (IBIT), adding a new warning regarding potential risks from quantum computing technology — which it sees as a potential threat to Bitcoin’s cryptographic architecture in the future.
Quantum computing becomes a long-term strategic risk
In an amendment filed on May 9, BlackRock warned that advances in quantum computing could undermine the cryptographic algorithms that currently protect Bitcoin transactions and wallets. If this happens, malicious actors could exploit it to gain unauthorized access to digital assets, including those held in trusts or by individual investors.
While quantum technology is still in its infancy, BlackRock believes that transparency about theoretical risks is necessary to ensure investors have a full understanding of factors that could affect the performance or security of the product.
James Seyffart, an ETF specialist at Bloomberg, said that adding quantum computing risks is part of standard practice when ETF issuers update their filings. “They have a responsibility to list all the potential risks, even the ones that are far-fetched,” he said.
IBIT Still Leads Despite Concerns
Despite adding a number of caveats, including regulatory risks, high energy consumption, mining concentration in China, and market crashes like the FTX crash, BlackRock’s IBIT has maintained its position as the largest spot Bitcoin ETF. Over the past 19 sessions, the fund has attracted more than $5.1 billion in net inflows.
Ethereum ETF Filing Reveals In-Kind Structure
At the same time, BlackRock also updated the S-1 filing for its spot Ethereum ETF, revealing for the first time plans to support an in-kind redemption mechanism.
Unlike the traditional cash model, the in-kind model allows investors to directly redeem ETF shares for ETH, saving on transaction costs and limiting slippage. This approach also avoids the need to convert digital assets into fiat currency, a regulatory issue.
While the US Securities and Exchange Commission (SEC) has yet to approve an in-kind structure for a crypto ETF, analysts believe that could change this year. “We expect the SEC to approve the in-kind redemption model later this year, particularly ahead of the current application deadline of around October or November,” Seyffart added.
Aggressive Roadmap and Strategic Preparation
The addition of technical elements such as quantum computing risk and physical acquisition structures shows that BlackRock is preparing carefully for the next stage of digital finance development. As crypto ETFs increasingly attract institutional investors, transparency and innovation will be key to helping funds like IBIT and Ethereum ETFs maintain a competitive edge.