Report:
Financial giant Goldman Sachs is actively seeking to become an authorized participant (AP) for Bitcoin spot ETF and has been in talks with BlackRock and Grayscale.
Background:
Nine issuers, including BlackRock and Fidelity, have announced their AP underwriters, the last step for SEC approval of Bitcoin spot ETF.
In response to the SEC’s request for many Bitcoin spot ETF applicants to submit S-1 amendment documents and confirm the background information of AP by last week, several applicants have already submitted and made public the relevant information.
Among the 13 applicants, BlackRock, Fidelity, Valkyrie, WisdomTree, Invesco/Galaxy, etc., have designated Jane Street Capital, JPMorgan, Virtu Financial, and Cantor Fitzgerald as their AP.
Note: AP is a key entity in the ETF primary market, directly purchasing or redeeming ETF shares from the issuer. Their work is crucial, not only to ensure that the ETF price is consistent with the value of its underlying assets but also to provide a key source of liquidity for the ETF.
Goldman Sachs wants to be the AP for BlackRock and Grayscale Bitcoin ETFs
According to a report by Coindesk today, well-known Wall Street investment bank Goldman Sachs is actively seeking to become an authorized participant for Bitcoin spot ETFs. The company is currently in talks with BlackRock and Grayscale in hopes of becoming their Bitcoin ETF AP.
If Goldman Sachs succeeds in becoming an authorized participant, it will join financial giants such as JPMorgan, Jane Street, and Cantor Fitzgerald. According to insiders, it is expected that each Bitcoin spot ETF will eventually have 5 to 10 authorized participants.
It is worth noting that many traditional large US banks are attracted to participate in the Bitcoin spot ETF market mainly because these applicants follow the SEC’s preferred cash creation/redemption model, thereby avoiding direct trading of cryptocurrencies.
Currently, Goldman Sachs, BlackRock, and Grayscale have not commented on this news.
Grayscale in talks with JPMorgan and Goldman Sachs to be its AP
According to Bloomberg’s report this morning, Grayscale is currently in talks with several companies, including JPMorgan and Goldman Sachs, to become an authorized participant for its planned Bitcoin spot ETF, according to informed sources.
In fact, as early as 2017, Grayscale had designated market makers Jane Street and Virtu as its AP. This new negotiation marks Grayscale’s further expansion of its partner range.
The market is eagerly awaiting whether the SEC can approve the first batch of Bitcoin spot ETFs by January 10. With the active participation of many large institutions in the discussion and their intention to become APs, this adds confidence to the approval of Bitcoin spot ETFs.
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