Grayscale Investments, a company that manages crypto assets, is said to be talking to big firms like JPMorgan and Goldman Sachs. They’re discussing the possibility of these firms playing a role as authorized participants for Grayscale’s planned spot Bitcoin ETF.
As of January 4, according to Bloomberg, Grayscale had discussions with JPMorgan and Goldman Sachs regarding their potential involvement. This news follows less than a week after Grayscale submitted a revised application to the SEC (Securities and Exchange Commission), but in that filing, they didn’t specify any authorized participants.
Wall Street Giants in Talks for Bitcoin ETF Roles
Recent reports indicate that Grayscale Investments is in discussions with JPMorgan and Goldman Sachs about their potential roles as authorized participants for a proposed spot Bitcoin ETF. This development comes shortly after Grayscale filed an amended S-3 application with the SEC, omitting the names of any authorized participants.
In a separate report, it is suggested that Goldman Sachs is in talks with BlackRock for a similar role in its own respective ETF. BlackRock, in a previous amendment to its S-1 filing, had named Jane Street and JPMorgan as authorized participants for its proposed ETF.
It took over ten years, but we’re finally on the verge of having spot bitcoin ETFs approved in the USA.
(Yes, we are.)
Many deserve credit for this milestone, but chiefly @Grayscale and its lawyers, who had the guts to fight this out in court and won.
Let’s fight more in 2024.
— Jake Chervinsky (@jchervinsky) January 4, 2024
The role of an authorized participant is crucial in managing an ETF, facilitating the creation and redemption of shares in the fund. ETF issuers can name multiple financial firms for this role. Interestingly, applicants aren’t required to disclose authorized participants in their S-1 or S-3 filings, leaving room for other firms to potentially come on board.
While JPMorgan is already named as an authorized participant for several proposed spot Bitcoin ETFs, Goldman Sachs might join other Wall Street giants, like Cantor Fitzgerald and Jane Street, in fulfilling similar roles for various issuers. Notably, Goldman Sachs, historically neutral on cryptocurrencies, sees a Bitcoin ETF approval as a catalyst for the market’s maturation and increased institutional investment, according to the head of digital assets, Matthew McDermott.
New Research note from me today. We still believe 90% chance by Jan 10 for spot #Bitcoin ETF approvals. But if it comes earlier we are entering a window where a wave of approval orders for all the current applicants *COULD* occur pic.twitter.com/u6dBva1ytD
— James Seyffart (@JSeyff) November 8, 2023
As of now, a spot Bitcoin ETF has not been approved in the United States. Analysts, however, estimate a 90% likelihood of approval before January 10 this year. Currently, 14 asset managers are vying to issue a spot Bitcoin ETF, aiming to provide regulated exposure to Bitcoin for institutional investors in the U.S.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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