Goldman Sachs among Wall Street titans backing BlackRock's Bitcoin ETF

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Goldman Sachs, UBS, Citadel Securities, and Citigroup have been selected to be authorized participants (APs) for BlackRock’s spot Bitcoin exchange-traded funds (ETFs) IBIT, according to a post-effective amendment dated April 4, 2024. If approved, these four Wall Street titans will join the list of APs, already including major names like Jane Street, JPMorgan, Macquarie Capital, ABN AMRO, and Virtu.

Authorized participants serve as ETF liquidity providers. Their roles are to facilitate the creation and redemption of ETFs’ shares, ensuring that ETFs trade at fair value. ETF issuers, like BlackRock, can designate more APs for their funds after launch. The more APs involved in an ETF, the better as competition helps keep the ETF’s price close to its actual value, benefiting all investors who trade the ETF.

An earlier report from CoinDesk suggested that Goldman Sachs was in talks with BlackRock and Grayscale about becoming key partners for their funds. The discussions reportedly occurred before the SEC greenlighted several spot Bitcoin ETFs.

Commenting on the latest addition, Bloomberg ETF analyst Eric Balchunas said that it’s the first time the world’s top 5 financial management organizations are displayed on the AP list of an ETF. This marks a major step towards mainstream acceptance of Bitcoin and reflects the increasing demand for investment vehicles providing exposure to digital assets.

JUST IN: BlackRock updated its bitcoin ETF prospectus w/ many new Authorized Participants incl first-timers Citadel, Goldman Sachs, UBS, Citigroup. Takeaway: big time firms now want piece of action and/or are now OK being publicly associated w this. H/t @akibablade @CryptoSlate… pic.twitter.com/z5Ntb43VhO

— Eric Balchunas (@EricBalchunas) April 5, 2024

Although US spot Bitcoin ETFs experienced massive outflows last month, trading activity tripled over the first two months. This uptick coincided with Bitcoin setting a record high of around $73,000.

According to data from Lookonchain, BlackRock’s IBIT now has over 259,381 BTC, worth $17.3 billion, under management. This puts them on track to surpass Grayscale’s GBTC, which currently holds 326,859 BTC, valued at almost $22 billion. Fidelity’s FBTC fund sits in third place with 149,339 BTC, equivalent to $10.1 billion.

Apr 5 Update:#Grayscale decreased 1,154 $BTC(-$77.34M) and currently holds 326,859 $BTC($21.9B).#Blackrock added 2,062 $BTC(+$138.16M) and currently holds 259,381 $BTC($17.38B).

9 ETFs(Including #Grayscale) added 3,417 $BTC(+$229M).https://t.co/tOzDtHixzi pic.twitter.com/3JiCt6paD1

— Lookonchain (@lookonchain) April 5, 2024

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