BlackRock has made updates to the S-1 registration statement for the iShares Bitcoin Trust (IBIT) by introducing new language that highlights potential risks associated with quantum computing.

The revised filing on May 9 shows a growing industry awareness of how advanced computing technologies could impact the cryptographic systems used in digital assets.

In the filing, BlackRock cautioned that future advancements in quantum computing might compromise the security framework that supports Bitcoin. If quantum technology progresses significantly, it could make the cryptographic algorithms used by Bitcoin ineffective, potentially allowing unauthorized access to wallets storing Bitcoin for the trust or its investors.

While quantum computing is still advancing, BlackRock stressed that the full capabilities of the technology are uncertain. The firm believes it is crucial to disclose any theoretical threats that could impact the performance or security of its cryptocurrency investment products.

ETF analyst James Seyffart from Bloomberg pointed out that the update is a routine part of ETF filings, where all potential risks are usually listed, no matter how unlikely they may be.

In addition to quantum risks, BlackRock's filing also addresses concerns related to regulatory actions, energy consumption, mining concentration in China, network forks, and past market events like the FTX collapse.

IBIT remains the largest spot Bitcoin ETF in the market despite these warnings, attracting significant investments.

In a separate filing, BlackRock amended its S-1 application for its spot Ethereum ETF to include plans for in-kind creation and redemption. This model would allow investors to swap ETF shares directly for Ethereum, potentially reducing transaction costs and market friction.

The SEC has yet to approve in-kind redemption models for crypto ETFs, but analyst expectations suggest progress could be made this year.

BlackRock's recent filing follows discussions with the US Securities and Exchange Commission (SEC) regarding crypto ETF staking and securities tokenization.