The ETF issuers may designate multiple financial institutions as authorized participants.
Grayscale Investments, a prominent cryptocurrency asset manager, is reportedly in discussions with notable firms like JPMorgan and Goldman Sachs regarding potential participation in a proposed Bitcoin spot exchange-traded fund (ETF).
According to sources familiar with the matter, Bloomberg reported this development on January 4.
These discussions have emerged shortly after Grayscale filed an amended S-3 registration statement with the U.S. Securities and Exchange Commission (SEC), notably without specifying any authorized participants.
Meanwhile, a previous media report indicated that Goldman Sachs is in talks with BlackRock to assume the role of authorized participant for BlackRock’s ETF, citing internal sources.
Authorized participants play a crucial role in ETF management, facilitating the creation and redemption of shares in the fund.
ETF issuers may designate multiple financial institutions as authorized participants.
It is worth noting that ETF registrants are not required to disclose authorized participants in their S-1 or S-3 filings, implying that other financial institutions may still join in the future.
While JPMorgan has been designated as an authorized participant for some proposed Bitcoin spot ETFs, Goldman Sachs may soon join the ranks of other Wall Street giants, including Cantor Fitzgerald and Jane Street, who have previously acted as authorized participants for other ETF issuers.
Goldman Sachs has historically maintained a neutral stance on cryptocurrencies and the digital asset space.
Matthew McDermott, Global Head of Digital Assets at Goldman Sachs, emphasized in a December 27 interview with Fox Business that the approval of a Bitcoin ETF would contribute to the maturation of the cryptocurrency market and attract institutional investment into digital assets on a broader scale.
It is worth noting that a Bitcoin spot ETF has never been approved in the United States.
However, industry ETF experts predict a 90% chance of approval by January 10.
Currently, there are 14 asset managers seeking to launch a Bitcoin spot ETF.
This development would provide institutional investors with a direct and regulated avenue to access Bitcoin in the United States.
