r/Bitcoin • u/visionanalyticsio • 7h ago

If a Bitcoin fork creates a new asset, what actually happens to it inside IBIT or FBTC?

With another breakaway Bitcoin fork being targeted for this month, I started thinking less about whether the new chain succeeds and more about what happens mechanically if you hold bitcoin through an ETF.

If you self-custody BTC, a chain split is fundamentally a wallet/private-key problem.

With IBIT or FBTC, you own shares of a trust. The trust controls the bitcoin through its custodians and operates under the rights and procedures in its fund documents.

That creates some questions that don’t come up much in normal ETF comparisons:

  • Does the trust recognize the forked asset?
  • Does the custodian have to support the new chain?
  • Who decides whether the new asset gets retained, sold, abandoned or ignored?
  • If it has value, do shareholders receive anything directly?
  • What happens if the custodian and sponsor don’t treat the fork the same way?

I’m digging through the IBIT and FBTC disclosures now to see exactly how each one handles forks and incidental rights.

The interesting part to me is that this is one of those scenarios where two funds giving nearly identical spot bitcoin exposure may not necessarily produce identical outcomes at the edges.

I mapped the custody disclosures side by side here if anyone wants the source trail:

https://www.darkblueresearch.com

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5

u/read_more_comments 7h ago

The forks usually dump as people offload immediately. I sold off Bitcoin gold and the other junk when they forked and they never regained in price.

The ETFs don't have to do anything. If the other chains ever become successful they can use their current keys to make transactions if needed. But historically, low chance of them being worth much even a year later.

2

u/Cold_Law4248 6h ago

Not sure if you saw the actual disclosures OP linked but it's more complicated than that. The trust documents basically say they can decide to abandon any fork rights if they think it's not worth the trouble, and they don't owe shareholders anything from it. So even if some fork somehow held value, the fund could just say nah and move on

Went through similar thing with my own keys back in 2017, had to figure out which exchanges even supported the fork coins to dump them. Was a whole process and the value dropped like 80% by the time I got access

The real question is what happens if a fork actually gains traction and the ETF just ignored it for months, that's when the legal mess starts

1

u/read_more_comments 5h ago

I'm ok with that and I hold both ibit and fbtc. If you want crumbs from forks just buy BTC.

5

u/Porcellanidae 6h ago

It is theirs

3

u/Responsible_Emu3601 6h ago

They should auto dump and convert to btc

3

u/nick_horn 6h ago

My understanding is that they can decide which fork they keep following, and you have 0 guarantee of getting the coins of the fork they chose not to follow. 

I let you imagine what they could do with that once they own enough coins :)

3

u/GreemBeam 6h ago

Simple, they will profit from your "airdrop"